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Global Dairy Prices Fall

25 November 2011

GENERAL - An overview of the global dairy situation.

With New Zealand and Australia in Spring milk production, output from both countries is expected to increase by 7.2 per cent.

In August, milk deliveries recorded in the EU were up 1.1 per cent year-on-year, with the 2011-12 dairying season shaping up to be the strongest in over five years.

US milk production is now expected to come in at 88.9 billion litres in 2011, up 1.6 per cent on 2010.

This steady rise in production has been catalyst to falling prices. Prices having now declined for seven consecutive months.

Chinese and Russian dairy demand appears to have fallen and financial concerns are adding pressure to the global markets.

Nonetheless, despite the consecutive monthly declines, dairy prices are still strong and have held up reasonably well given the circumstances. In October, prices were 48.5 per cent above their average over the past decade, and up 6.3 per cent on a year earlier.

One thing to consider is whether the EU market will look at gearing up production over the next few years in anticipation of the end of EU milk quotas in 2014?


TheCattleSite News Desk



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