November 10, 2016

Global Demand Could Help Rally Milk Prices

 |  By: Anna-Lisa Laca

Throughout the presidential campaign trade was a hot topic among candidates and voters alike. Similarly it was top of mind at the 2016 MILK Business Conference. U.S. dairy farmers are looking to global markets to help bolster milk prices, but a global glut of milk will make that a challenge in the short term. 

“We’ve seen EU quotas come up which was basically New Zealand growing milk supply 50% in a 12 month period,” says Tom Bailey a senior dairy analyst with Rabobank. “That’s a significant supply shift.”

Bailey says that while it seemed supply was overwhelming the market demand was there all along and will grow in the future.

“We can’t really rationalize where all the supply is going to come from that the world will be needing over the next 10 years,” he says. “When we look market by market it’s tough to grow milk supply.”

Bailey says the U.S. is one of the few markets around the world that will have the land, industry and enough access to feed inn order to grow enough supply to meet future market demand. The No. 1 headwind facing growth in export markets, the strong U.S. dollar.

Watch the full interview with Bailey below: