RaboBank urges caution on dairy outlook

RaboBank has issued a cautionary report on the global dairy outlook, attributing concerns to factors such as increasing milk production, weak Chinese demand, and trade tensions. The bank forecasts that milk production from major regions will increase to 326.7 million metric tonnes by 2025, marking a 1% rise.

Despite the current market strength, RaboBank anticipates a "natural correction" rather than a sharp downturn, expecting a recalibration due to expanding supply and uncertain demand. Mary Ledman, global dairy strategist at RaboResearch, emphasized challenges ahead, including passing higher dairy costs to consumers amid post-COVID inflation and weak economic conditions globally. Moreover, ongoing trade tensions and volatile tariffs are projected to impact global dairy trade flows significantly.