Gap gets bigger between high and low-cost producers globally, says Rabobank
Credit: adobe stock
Milk production costs have surged across many dairy-exporting regions, widening the gap between high and low-cost producers, according to Emma Higgens, senior analyst – agriculture, at Rabobank RaboResearch, in an opinion piece on its website. Despite some relief in 2024, costs remain above the five-year average, she observes.
Milk production costs have risen across many dairy-exporting regions, creating a widening gap between the highest and lowest cost producers. China, the largest dairy importer, has become more cost-competitive, while Oceania has the lowest production costs. The next decade is expected to see more expensive and variable operating costs due to regulatory pressures, energy transitions, climate change and higher interest rates. Dairy producers are increasingly vulnerable during milk price downturns, making cost control crucial for survival. Meeting medium-term demand will require wider producer margins, and efficiency-focused producers will be best positioned to navigate future challenges.
The next decade will see more expensive and variable operating costs, making cost control crucial for dairy producers to survive future challenges, she states.