Pressure will continue to build in global dairy markets. This is due to waning global market sentiment in Q3 2017, as growth in the exportable surpluses across the export regions gained momentum. This growth will continue to expand in the coming period, according to the latest RaboResearch report ‘Dairy Quarterly Q4 2017: Rising Tide of Milk Weighs on Sentiment’.
“Growth in milk supply—which turned positive in Q2 2017—accelerated in Q3 2017, but the growth in the exportable surpluses has not come without its challenges,” says Michael Harvey, Senior Analyst – Dairy at Rabobank. In particular, the Oceania spring peak has stumbled due to unfavourable weather conditions. “Growth in the global exportable dairy surpluses will continue to expand in the coming period, pressuring global markets.”
Meanwhile, geopolitical tensions and dairy policy uncertainty are contributing to the weaker market sentiment and remain key factors to monitor. Attention is now squarely fixed on production trends in Europe in the coming six months. Growth in production is expanding, but milk price signals and efforts to curb production loom as disruptors.
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