Milk production is forecast to continue expanding across the dairy-exporting regions, despite weather-related issues, lower milk prices, and efforts to bring supply back in balance with demand in many areas, according to the latest RaboResearch Dairy Quarterly titled “Waiting for the Dust to Settle.”
“The Northern Hemisphere has experienced a rebound in milk and dairy product prices toward the end of Q2, but it may be too soon to call this a true recovery,” writes Ben Laine, RaboResearch Dairy Analyst. “Much of the price support has been driven by government aid that will likely slow in the months ahead. The upcoming US presidential election could extend heightened levels of support in the US.”
Many dairy markets are still dealing with imbalances from demand destruction due to government lockdowns. The heightened retail sales and lower foodservice sales will begin to converge, returning to a more normal balance, but it will take time, and there will be limitations that will prevent a complete return to previous norms, especially in foodservice sales.
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