IFCN conference looks at milk price cycle
At the last IFCN conference, during the milk price crisis, it was predicted that milk prices would recover by the end of 2016.
Dr Torsten Hemme, managing director of the IFCN, said it is important to see the bigger picture of cycles within dairy, noting the cycle that started in 2013 has now come to an end.
Decline in milk production
The persistent low prices over the last two years have triggered a supply response, with 2016 showing the lowest milk production growth since 1998.
Leading in the growth of milk production last year were India, US and the Netherlands, offsetting lowest production growth in China, Brazil, Argentina and Oceania.
IFCN said demand growth has not yet recovered to records from 2006 or the average level, yet it has not been devastating. Moreover, milk import demand has picked up in China, Brazil, the Philippines and Mexico.
Stabilize rather than grow
The IFCN said looking-forward, however, various elements hint that milk prices are not likely to increase significantly in the near future, but rather to stabilize.
In terms of production, since October 2016 milk production growth resumed worldwide and has been rising.
The issue of stocks remains a major uncertainty and estimated levels are still substantial. Furthermore, oil and feed prices, important drivers of the milk price, appear to remain stable.
IFCN said after constant growth in farm numbers in the past, there has been a gradual global decrease since 2014 at around 1.5% annually. However, milk production continues to increase.
Anders Fagerberg, chairman of the IFCN board concluded at the end of the conference that the key is to cope with change and have confidence in and access to data.