Farmgate prices reaching highs globally, says Rabobank

Closeup of black and white Holstein dairy cows eating forage. Credit: JackF, adobestock photos
A recent webinar from industry analysts Rabobank has shown that global farmgate prices are reaching new highs, for an average of US$0.50 per litre. Mary Ledman, Rabobank global dairy analyst, notes that “some of the US prices are lower than the others, but butter prices seem to be in a world of their own, being driven by strong domestic demand in places like Europe and the US. This is drawing milk into butterfat as a result.”
The US, New Zealand and Europe, have all moved to a similar price level, with NZ farmers expecting the highest farmgate prices ever, with elevated margins and better prices in 2025. In China, for the first time there are lower milk prices than elsewhere around the world, she points out. “It has a domestic product that is priced more competitively than the world market right now.” However, the lower prices may slow the momentum in the country’s production growth.
Overall, milk production growth in 2025 for the global main producers should see an increase of 0.8% for the year. She notes with increased production across the board, “They are getting pretty close to the peak production we saw in 2021. Europe produces 160 million metric tonnes of milk, amounting to 33% of global dairy trade, New Zealand accounts for 25%, the US makes up 15%, and South America is 5% or more. Overall, there should be positive growth in trade in 2025, due to increased production.”
Lucas Fuess, North American dairy industry analyst, says the US has returned to growth, and expected it to continue into 2025 as well. “The majority of this growth was due to the very weak prior year, but an 0.9% increase for the year. A lot of declines were driven in west coast states, but there has still been strong production growth in the upper Midwest. California was down nearly 4% in October due to the impact of avian flu in the state., California has the majority of cases. Overall, farmer margins have hit multi-year highs, due to strong milk prices and declines in feed prices, three or four year lows. The year 2025 will be an adequate year for dairy farmer profitability in the US,” he notes.
The full webinar can be found here: https://www.youtube.com/watch?v=bVuoLCdzkfA