Struggling milk supplies to fuel 2017 price risesStaff Writer | December 21, 2016
Dairy prices are expected to continue to rally into the New Year due to struggling global milk production volumes, according to Rabobank’s latest quarterly report.
Food trade EU milk deliveries look unlikely to recover
Oceania’s peak months have been affected by low milk prices and difficult weather, so a significant volume recovery looks unlikely until the new season begins in mid-2017.
Increased import demand from China is also expected to help price rises, though to a lesser extent than the supply reduction.
However, rising commodity prices could, in turn, dampen demand from other key importing regions, which could partly self-limit the upward pressure on prices.
Stock levels are also expected to hamper prices for some products, leading to further divergence in prices for different commodities.
SMP prices are likely to continue to be held back by heavy stocks, while fats should continue to rise into 2017, according to Rabobank’s forecasts. ■