Margins are widely tipped to strengthen on the back of higher production and increased dairy commodity prices, though concerns about China imports remain and Argentina’s output remains low.
With recovering cheese prices, US farmers could soon see improved margins after 8 months of declines. In Europe, possible input cost volatility makes the market hard to predict.
More than a year on from Russia’s invasion of Ukraine, dairy commodity prices have started to recover from the highs experienced in 2022. But as the market adjusts, processors find themselves under increasing pressure to reduce farmgate milk prices.
The co-op is hopeful however that the supply-demand balance in dairy will be restored this year and expects branded volumes to start growing again from 2024.
A perfect storm of lower production and higher exports and demand has fuelled consumer fears that butter would be of short supply right before the winter holidays. Fear not, says IDFA.
Maxum Foods said global dairy markets are expected to remain tight, keeping commodity prices firm as milk growth is minimal and demand remains positive.
