Rabobank Shakes Dairy Market: Downsides Loom

Rabobank, a prominent entity in agribusiness analysis, has released a cautionary report for the global dairy market, indicating possible downsides for the latter half of 2025. The "Global Dairy Quarterly Q2 2025: Too good to be true?" report highlights concerning economic factors including trade volatility and evolving production challenges. An easing in the US/China dairy trade tensions could introduce uncertainty for the European Union, particularly with a looming deadline for tariff negotiations.

A significant source of market uncertainty arises from volatile trade, particularly impacted by shifts in US trade policies under Mr. Trump. The temporary reduction in tariffs on US dairy exports offers benefits to American exporters but complicates the landscape for EU exports, which are valued at 2.2 billion euros.

The analysis identifies a potential imbalance between rising supply levels and a possibly wavering demand that could disrupt the recent boom in dairy commodity prices. Mainland Europe faces challenges, such as BTV and reduced cow numbers, yet modest growth in EU milk production is still anticipated.

Rabobank emphasizes the importance of risk management strategies for dairy stakeholders as trade policies continue to shift. Despite challenges, British farmers might experience a gradual easing instead of a sharp decline. The call to action is clear: closely monitor global trade policies to navigate potential market cooling.