A new Rabobank forecast predicts rising production, a move that could pressure farmgate prices and reshape the global agribusiness landscape.
The global dairy industry is poised for a significant market shift, with a new Rabobank report forecasting a surge in global milk production. According to the article, this growth could put “supply-side pressure” on prices, challenging the recent period of strong farmgate returns. While New Zealand dairy farmers are still on track for a high $10/kg MS payout, achieving that target will require a delicate balance between this new supply and the uncertain pace of demand recovery.
The report identifies key regions where this growth is occurring. Production in the United States has reached its highest growth rate since 2021, while the European Union continues to recover from a challenging two-year period. In New Zealand, the 2025-2026 season is off to a strong start, with a new production record possible. This collective increase from major global producers is the central risk factor in Rabobank’s outlook, as it could flood the market with more milk than can be consumed.
While the supply side of the equation is building, the demand side presents a mixed picture. Rabobank senior analyst Emma Higgins notes that global demand is not growing at the same pace. The report points to ongoing challenges in key markets like China and Southeast Asia, where weak consumer confidence and inflationary pressures continue to be a factor. This imbalance between a growing supply and a cautious demand is the primary reason for the expected price volatility.
For New Zealand farmers, this presents a nuanced outlook. While they are currently enjoying strong farmgate prices, the article suggests that these prices may be “tested” by the global market. The report acts as a cautionary signal, advising farmers to prepare for potential price volatility and tighter margins ahead. This situation highlights the sensitivity of the entire dairy economics ecosystem to global macro-economic trends and supply-demand imbalances.
In conclusion, the Rabobank report is a key piece of data journalism that provides a clear, proactive warning to the international dairy community. It underscores that while strong revenues and affordable feed prices in New Zealand are positive for local producers, the future remains dependent on a delicate balance. For producers, manufacturers, and analysts, this is a clear case study in how global supply dynamics can have a direct and swift impact on local profitability and the entire food supply chain.
Source: Farmers Weekly, “Global milk surge may test pricing”
You can now read the most important #news on #eDairyNews #Whatsapp channels!!!
🇺🇸 eDairy News INGLÊS: https://whatsapp.com/channel/0029VaKsjzGDTkJyIN6hcP1K
