Tuesday, 19 March 2024 09:55

Dairy demand on the rise

Written by  Staff Reporters
Rabobank senior agricultural analyst Emma Higgins. Rabobank senior agricultural analyst Emma Higgins.

There is increasing evidence that dairy demand is on the upswing, according to Rabobank senior agricultural analyst Emma Higgins.

She notes that while the last Global Dairy Trade (GDT) produces a drop in prices this followed six consecutive events with positive price movements.

"The recessionary fears prevalent among many countries throughout 2023 have largely passed," says Higgins.

"We've also seen positive developments in China with retail and food service sales showing strength through the Lunar New Year.

"Slowing milk production growth in China means we expect imports to improve in 2024, even if they remain lower than the long-term average."

Higgins says the bank's expectation is that slow but steady dairy commodity price gains will materialise this year.

Rabobank has lifted its forecast payout for the season by 5c to $7.80/kgMS, to match Fonterra's forecast mid-point. The co-op, which releases its interim results this week, will give another update on the forecast price.

While dairy prices are expected to rise, there are some things worth watching out for, including upcoming eletions in many key dairy regions.

"European parliament elections are approaching in June while Americans will go to the polls to elect a new president and many members of Congress in November," Higgins says.

"Any leadership shifts could mean new approaches to policy, including free trade agreements, sustainability policies,  or nutition priorities that trickle back to impact dairy prices."

Sector participants will also be keeping a close eye on developments in the Dutch and Irish dairy sectors where farmers are facing lower nitrogen derogation limits that will decrease application rates of organic nitrogen from animal manure in the 2024 season and beyond.

"This will reduce carrying capacity per hectare, which could result in farmers re-balancing their herd size and/or higher costs for manure disposal," says Higgins.

"And it's not just the Netherlands and Ireland dealing with this challenge, with Denmark's derogation allowance also up for renewal in July 2024."

Other watch factors identified in the report include geopolitical conflict, weather patterns and feed costs.

More like this

Featured

Farmers fined for cattle abuse

A Waikato cattle farming family have been fined $23,000 for failing to provide sufficient food and care for their animals, resulting in more than half a dozen animal deaths.

App trial yields promising results

An initial trial of an app, funded by Beef + Lamb New Zealand, has demonstrated significant results in reducing drench inputs during a small-scale study.

National

Share farmers with big plans

With only about eight weeks to go before their cows are dried off, the 2024 Manawatu Dairy Industry Awards Share…

Team effort brings results

For the team at Westmorland Estate Limited in Waikato, it has been another year of everyone working together to achieve…

Machinery & Products

New name, new ideas

KGM New Zealand, is part of the London headquartered Inchcape Group, who increased its NZ presence in August 2023 with…

All-terrain fert spreading mode

Effluent specialists the Samson Group have developed a new double unloading system to help optimise uphill and downhill organic fertiliser…

Can-Am showcases range

Based on industry data collected by the Motor Industry Association, Can-Am is the number one side-by-side manufacturer in New Zealand.

» Latest Print Issues Online

Milking It

Avian flu in cows

A lethal form of avian influenza has been confirmed in US dairy cattle in Texas and Kansas, the US Department…

China trade

OPINION: Last week's revelation that data relating to New Zealand MPs was stolen amid Chinese state-sponsored cyber espionage targeting two…

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter