Rabobank Forecasts Dairy Margin Recovery on Price Uptrend
Source: The DairyNews
Rabobank's latest update suggests a promising outlook for dairy farmers, with a steady rise in dairy prices anticipated to bolster margins in the latter part of the year.
The multinational banking group's report highlights signs of inflation easing, which could drive consumer demand in the foreseeable future.
Despite challenges such as weather constraints leading to a decrease in EU and UK milk production by nearly 1.7% year-on-year, Rabobank predicts a turnaround with lower output expected in the first half of 2024 followed by a more positive trend in the latter half.
Looking forward, Rabobank anticipates global prices to improve at the farm gate level while feed costs ease, potentially encouraging domestic milk production among UK farmers. However, the report cautions that geopolitical issues and shipping risks continue to deter buyers.
While recent growth in Chinese demand during Chinese New Year indicates positive momentum, the report underscores the importance of monitoring the Chinese market for global export prospects, given the ongoing imbalance between production and demand.
Locally, as the spring flush approaches, increased commodity prices may take time to translate to producers, with weakness projected in Q2 but improvements forecasted in Q4.
The extent of this year's spring flush remains uncertain due to poor weather conditions, potentially influencing market dynamics. Moreover, ongoing pressure on UK milk supplies, particularly with declining Irish supplies, could further support prices in the foreseeable future.
Despite challenges such as weather constraints leading to a decrease in EU and UK milk production by nearly 1.7% year-on-year, Rabobank predicts a turnaround with lower output expected in the first half of 2024 followed by a more positive trend in the latter half.
Looking forward, Rabobank anticipates global prices to improve at the farm gate level while feed costs ease, potentially encouraging domestic milk production among UK farmers. However, the report cautions that geopolitical issues and shipping risks continue to deter buyers.
While recent growth in Chinese demand during Chinese New Year indicates positive momentum, the report underscores the importance of monitoring the Chinese market for global export prospects, given the ongoing imbalance between production and demand.
Locally, as the spring flush approaches, increased commodity prices may take time to translate to producers, with weakness projected in Q2 but improvements forecasted in Q4.
The extent of this year's spring flush remains uncertain due to poor weather conditions, potentially influencing market dynamics. Moreover, ongoing pressure on UK milk supplies, particularly with declining Irish supplies, could further support prices in the foreseeable future.
