Rabobank anticipates a gradual uptick in dairy commodity prices
Source: The DairyNews
In the latest Global Dairy Quarterly Report for Q1 2024, Rabobank anticipates a gradual uptick in dairy commodity prices throughout the year, offering a ray of hope for farmers amid persistent margin challenges. While not heralding a record-breaking price year, the forecast points to a return to profitability for dairy producers worldwide.
Despite ongoing margin challenges, there are positive indicators for improved global dairy prices. Dairy product price forecasts suggest a more favorable year, providing a much-needed boost to farmgate margins after a challenging 2023.
However, the struggle in milk supply growth persists, and a return to production expansion is expected to take time. Rabobank projects lower year-over-year output for the first two quarters of 2024, with a positive turnaround anticipated in the second half. Easier-to-overcome comparable data points are expected to contribute to this rebound.
While recent months have seen lower milk production, global demand has remained sluggish. Looking ahead, Rabobank identifies a shift, indicating an upward trend in demand. Some countries have moved past the worst of recessionary fears, and though global economic growth may be subdued, the overall outlook shows modest improvement. The low levels of global dairy product stocks, however, introduce an element of price risk for end-users in the event of any supply shock or sudden increase in demand.
The combination of slow but steady dairy commodity price gains and anticipated lower feed costs presents a more optimistic margin outlook. Rabobank foresees an eventual upswing in milk production growth in the Big 7 by the second half of 2024, marking a positive turn for farmers globally. While not projecting a record-setting year in terms of prices, the report suggests a welcomed return to profitability for the dairy industry.
However, the struggle in milk supply growth persists, and a return to production expansion is expected to take time. Rabobank projects lower year-over-year output for the first two quarters of 2024, with a positive turnaround anticipated in the second half. Easier-to-overcome comparable data points are expected to contribute to this rebound.
While recent months have seen lower milk production, global demand has remained sluggish. Looking ahead, Rabobank identifies a shift, indicating an upward trend in demand. Some countries have moved past the worst of recessionary fears, and though global economic growth may be subdued, the overall outlook shows modest improvement. The low levels of global dairy product stocks, however, introduce an element of price risk for end-users in the event of any supply shock or sudden increase in demand.
The combination of slow but steady dairy commodity price gains and anticipated lower feed costs presents a more optimistic margin outlook. Rabobank foresees an eventual upswing in milk production growth in the Big 7 by the second half of 2024, marking a positive turn for farmers globally. While not projecting a record-setting year in terms of prices, the report suggests a welcomed return to profitability for the dairy industry.
