USA: Volatility to remain ‘a persistent force’ in dairy despite likely ‘slow but steady’ increase in prices

Other Milk

Published Mar 26, 2024

Tridge summary

The article provides an in-depth analysis of the dairy market in China and the US, outlining the challenges and opportunities faced by dairy farmers and companies in both countries. In China, the dairy market is experiencing low raw milk prices and net profit losses among leading dairy farming companies due to weaker demand and lower sales prices, with upcoming national food safety standards expected to have a minimal impact this year. In contrast, the US dairy market's future is heavily influenced by trade policy, with a focus on the potential for cheese exports despite a decrease in dairy exports in 2023 compared to the previous year. The article also discusses the global dairy market's outlook, noting a slow but steady increase in prices expected over the year, which could lead to a long-term return to profitability, despite the anticipated market volatility and the current year-over-year decline in the dairy products Consumer Price Index (CPI).

Disclaimer: The above summary was generated by a state-of-the-art LLM model and is intended for informational purposes only. It is recommended that readers refer to the original article for more context.

Original content

While the bank’s outlook analysis suggested that farmer margins would improve in most regions as the year progresses, in China, the expectation is for raw milk price to likely stay low, said Michelle Huang, Shanghai dairy analyst for Rabobank. She also clarified that China’s National Food Safety standard on liquid milk is unlikely to influence this year’s trade, specifically whole milk powder imports. “The standard is still under public review and has not been implemented yet,” she said. “Considering the time [required to implement it], the new standard on 2024 WMP imports should not be a key influencing factor. “In the meantime, top two players like Yili and Mengniu, who hold 87% of the UHT value share, have already used domestically sourced raw milk to produce UHT white milk. Once the new standard is implemented, this should only have an impact on smaller players (less than 20% UTH share) that used to import WMP and use reconstituted milk in UHT.” The report also highlighted ...

Source: Dairyreporter