Rabobank forecasts slow growth in world milk prices in 2024

According to Lucas Foys, Senior Dairy Analyst at Rabobank, after a decline in milk production for two consecutive quarters, a slow recovery in milk yields in key global dairy markets is likely in 2024.

The expert believes that in the first half of this year, milk production in Europe will decline, while in New Zealand it will remain stable. Foys believes that milk production in the United States may decline in the first quarter of 2024. According to the USDA, in January, American farmers milked 8.66 million tons of milk, which is 1% less than in January 2023.

The analyst explains the decline in milk supply in the world by unfavorable weather conditions, low profitability of dairy farms, as well as sustainability issues and regulatory issues affecting production volumes. In particular, the U.S. has seen a seven-month decline in milk yields, and the number of cows is currently the lowest since 2019. Farmers are forced to slaughter cows due to low profitability of milk production. The number of heifers in the United States to replace dairy cows is limited, and high beef prices are driving more dairy cows to slaughterhouses.

Foys believes it is unlikely that milk prices will rise sharply this year in the face of limited demand, as unlike in 2022, demand for dairy products is weaker. Most likely, in 2024, there will be a slow, steady increase in prices as demand picks up. Farmers’ profit margins may improve in the event of higher raw milk prices but cheaper feed.

Tags: prices, Milk