A new Rabobank forecast predicts robust growth, a move that could pressure British producers and reshape global dairy economics.
The global dairy industry is on the verge of a significant market shift, with a new forecast from Rabobank predicting a period of increased supply growth. The article from AHDB reports that this growth is expected to outpace earlier predictions for the second half of 2025. This potential surge in supply, driven by robust production in key regions, could disrupt the period of high and stable prices that has recently benefited many producers, including those in the UK.
The report details where this growth is coming from, providing crucial data journalism for the international agribusiness community. Rabobank predicts a return to growth in the European Union and robust supply growth in both the United States and New Zealand. This widespread increase in production is expected to put significant pressure on global prices, as the demand side of the equation is not keeping pace due to persistent global economic challenges, including weak consumer confidence and inflationary pressures.
For British dairy producers, this global shift presents a new challenge. The article notes that they have recently been incentivized by high prices to increase their milk production by approximately 5% per annum. However, the building global supply and contracting demand is expected to pull back international prices, which will, in turn, put pressure on UK commodity prices. This situation underscores the interconnected nature of the global food supply chain and the need for local producers to stay informed about international trends.
The dairy economics of this situation are clear: more supply with less-than-equal demand will lead to tighter margins. The article warns that British producers should be prepared for a period of lower price stability and reduced profitability in the months ahead. This forecast is a vital piece of information for farm businesses, analysts, and policymakers, as it highlights the importance of strategic planning and risk management in a volatile global market.
Ultimately, this report serves as a timely warning that the current high-price environment may not last. The Rabobank forecast is a clear signal that the fundamental market dynamics are changing, and a period of building supply is on the horizon. For all stakeholders in the international dairy community, this is a clear example of how macro-economic trends can directly influence the profitability of the entire agribusiness sector, from the farm gate to the consumer.
Source: AHDB, “Rabobank predict global supply growth – how could this impact British dairy producers?”
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