Global Milk Production Growth to Slow in 2014

Rabobank Publishes a New Report on the Global Dairy Industry

By Amanda Brodhagen, Farms.com

Rabobank, a leading provider of agricultural financial services, published a new report examining the landscape of the global dairy industry. The following is a recap featuring the highlights of the eight-page report.

“Milk production growth will slow considerably in the second half of 2014 as lower prices are passed to producers, weather normalizes and comparables become tougher to exceed,” the report said. “Consumption in export regions will also slowly improve on the back of higher incomes, employment growth and falling retail prices.”

Regional Projections

EU: Milk production has increased. Margins were good, which has made it attractive for farmers to produce over their milk quota limits. Growth is expected to continue.

US: Milk (wholesale) prices have dropped. And the U.S. is expected to see the most decline compared to other regions.

New Zealand: Milk production was up 17.5% compared last year in the same period. Export volumes are expected to do well.

Australia: The outlook remains “positive”. However, southern dairy producers are expected to experience lower farm-date sales, due to lower commodity prices.

Brazil: As usual, milk production fell seasonally, but it was considered much slower compared to last year. Dairy producers will continue to look for export opportunities.

Argentina: Milk production is expected to continue to fall. Production costs relating to rapid inflation will pose a challenge for the second half of 2014. The country is forecasted to experience significant rainfall (El Niño events) which will be challenging for dairy farmers.

Rabobank publishes numerous agri-food reports on a regular basis, including quarterly updates on livestock commodities in the dairy, chicken and beef sectors.