Despite favorable price expectations, Rabobank flags multiple risks that could dampen the outlook. The potential for economic slowdowns in China and developed markets, volatile currency movements, and continued cost inflation for inputs like feed and labor could pressure margins and affect dairy product affordability for consumers.

In Oceania, milk production has remained below historical averages, with New Zealand’s season start underwhelming and Australian supply still contracting. Meanwhile, European production is flat, impacted by environmental regulations, weather conditions, and rising costs. U.S. production has shown some growth, but high cull rates and low on-farm margins suggest constraints ahead.

Rabobank also points to strategic stock management and cautious buying behavior among importers as additional balancing factors in the price equation. While buyers may increase activity in the second half of 2025, many will seek value over volume, carefully timing their procurement to minimize exposure to price volatility.