Could Milk Prices Recover in 2017?
As the global glut of milk continues, Rabobank suggests sustainable prices could return in the first half of 2017 if supplies and global demand cooperate.
In the second quarter of 2016, Rabobank says the world’s dairy farmers started decreasing production. According to Fonterra, production in New Zealand and Australia decreased, but USDA says production in the U.S. increased this quarter. Production has increased in Europe too, according to Rabobank.
What will the rest of the year look like in dairy regions around the world?
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Light at the End of the Tunnel?
Despite the industry’s challenges, Rabobank thinks there is still room for some price correction in 2017.
“While we still forecast prices to rise modestly inn 2017, rises will continue to be damped by continuing low demand due to low oil prices, trade bans and affordability in emerging markets,” Rabobank officials say. “In the short term, prices will again weaken back until tightening supplies eventually start to turn the market in the first half of 2017.”