China, Russia are behind a bear market in dairy prices
The dairy industry is entering a “protracted” bear market, according to Rabobank’s Food & Agribusiness Research and Advisory group. In its 2014 third-quarter report, the group says the price of internationally traded dairy commodities has already fallen 30%-45% below February levels as a strong wave of milk from export regions collided with weaker Chinese buying and a Russian ban on import from key suppliers. With other importers unable to take up the slack, the market loosened considerably.
While Rabobank stated that it believes a bottom has been reached in the international market, market rebalancing will be a slow process.