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January 2, 2017

Could Dairy Have Bullish Story in 2017?

 |  By: Ashley Davenport

While the stock market has been on a bullish run to close 2016, most ag commodities are feeling the pressure, but dairy has had better luck with milk contracts finishing the year on a higher note.

Milk prices are looking friendlier for dairy producers, and Rabobank doesn’t expect that to change anytime soon.

Rabobank says the current price rally has more upside potential as they expect global milk supply to lag in the upcoming months.

While the U.S. is seeing growing production, that’s not the aces around the globe. Rabobank says that tightened global production and smaller stocks could prove to be a bullish story for dairy prices.

Some analysts are agreeing, saying milk is one commodity with a lot of excitement right now, especially when the USDA is expecting U.S. dairy product exports to more than quadruple over the next 10 years.

If these expectations are met, the U.S. would be the world’s third largest dairy product exporter.

This news comes after exports declined in 2015 due to hurdles like Russians banning imports of most U.S. dairy products and a weaker appetite from China.