Dairy markets expected to rebalance

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Dairy markets expected to rebalance

A dairy analyst with RaboResearch says dairy markets will undergo a balancing act until the middle of next year.

Ben Laine tells Brownfield markets are in between the initial disruptions of the pandemic but still assessing what will be changed longer term.

“When you look around the world at the ways that COVID has impacted the dairy sector, it’s really been a matter of how sensitive is a given region to foodservice demand and also what kind of aid has there been.”

Laine says the food box program in the U.S. provided a faster rebound to markets compared to some other regions without as much government intervention, but he expects that to dwindle after the election.

“Regardless of the outcome of the election, I would expect to see a little bit of a lower level of support.”

He says currently the market isn’t calling for a major increase in milk production but if demand slows, the U.S. could be in an oversupply situation given the current rates of growth.

Rabobank’s latest quarterly outlook is calling for dairy production to increase slightly in the major dairy regions of the globe in the fourth quarter through the second half of 2021.