Rabobank predicts milk scarcity

Agricultural analysts rabobank predicts that milk production growth in key export regions will slow to a trickle over the next 12 months, as farmers respond to low milk prices, high feed costs and pockets of unfavourable weather. The Dairy Quarterly also explains that this will reduce the volume of surplus product available for international sale from key export regions. Thus, prices will rise substantially to achieve the required demand rationing to balance the international market.

For the EU, exports have been brisk, according to Rabobank, which helped tighten the dairy market there throughout the third quarter of 2012. Milk production is expected to increase in the fourth qaurter as many farmers continue expanding herds leading up to the removal of quotas in 2015. The EU has entered the last quarter with around 130,000 of butter in PSA inventoris as excess stock, which is “surprisingly little,” the bank notes.

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