Short-term stability, long-term volatility – IFCN

Published 16 June 17

World milk prices are expected to stabilise, with significant increases looking unlikely in the near future, according to the International Farm Comparison Network’s (IFCN) short-term outlook. The group presented its latest view of the markets at its annual researcher conference in Kiel, Germany, on 12-14 June.

Global milk prices have risen by more than 60% over the last year according to IFCN, due to a reduction in world milk supplies. In response to these price improvements, global production began to grow again during the first half of 2017. Meanwhile, IFCN says world demand for dairy has not yet recovered to previous levels, though import demand has grown in some key regions, including China.

As a result, global milk prices are now hovering close to IFCN’s long-term average and it expects this to continue in the short-term. However, IFCN also points out significant uncertainties in the market which could affect this, in particular the substantial amount of dairy produce still held in stocks.

Considering prices in the longer-term, IFCN’s Managing Director Dr. Torsten Hemme reminded the conference of the cyclic nature of dairy markets. He urged attendees: “See the bigger picture of price cycles in dairy. The cycle that started in 2013 has now come to an end. And we shall be prepared for the next one.”