World dairy markets are not likely to ever change their volatile nature, but signs of recovery and growth are starting to appear.
That’s the message Veronique Pilet, head of economics at the French dairy inter-branch organization CNIEL, told those attending the World Dairy Summit in Belfast, Northern Ireland.
“Historical lows are giving way to a period of recovery,” said Pilet. “And we are now seeing a stronger demand for dairy in 2017.
“The global dairy market remains uncertain and the only thing that we can say for sure is the volatility, which is a result of supply and demand issues, is here to stay.
“Dynamism in the European and U.S. markets is leading recovery, and production prospects over the next few months remain good. Butter prices are at an all-time high. However skimmed milk powder prices are still eroding.”
Pilet said recovery this year followed a year when both global production of dairy and consumption were stagnant and in some areas showed a slight decrease.
She said contributing factors to current market conditions could be the Russian ban on importing dairy products from the European Union, decreased buying power in oil-producing countries and the poor economic situation in South America.
New Zealand remains the world’s largest exporter of dairy with a 29 percent share of the market, closely followed by the EU at 28 percent and the U.S. at 24 percent.
Overall production of milk rose by 0.9 percent in 2016 compared with growth rates of two percent and more in recent years.