More milk than market – Rabobank

In its latest quarterly Dairy Report released earlier this week, Rabobank stated that it still expects a recovery in global dairy prices; however, stock levels may prevent an upturn in the market before the first half of 2016. Rabobank Director of Dairy Research New Zealand and Asia Hayley Moynihan said the market correction has been delayed by the abolishment of EU quotas. She added, “We are operating in an environment where global milk production is rising faster than local demand growth. There is simply too much milk in the market. This has left exporters looking for additional offshore sales at a time when China and Russia have been largely absent. While global milk production is set to increase further, the growth rate is expected to slow down, particularly in New Zealand and the US. However, an improvement in demand should bring balance to the market by early next year. The rate of initial price recovery will, however, be dampened as the market works through accumulated excess stocks. As such, we are unlikely to see stronger upward momentum in prices until the second quarter of 2016.” To read more, click HERE.