An analysis of the global dairy industry by Rabobank, New York, forecasts an easing of global milk pricing through June. Rabobank’s Food & Agribusiness Research and Advisory group said that the exportable dairy supply rose strongly in the last three months of 2013, and is expected to continue into 2014 as producers respond to improved margins through high milk prices and falling feed costs.
The bank expects a strong Northern Hemisphere production season following what it termed “an exceptional” season in the Southern Hemisphere to generate more than enough exportable supply to exceed China’s needs from the world market. However, a Rabobank analyst said that the rate of price reduction will be limited by structural constraints on suppliers, the need to replenish depleted buyer inventories and ongoing demand growth in line with a slow economic recovery.