5 Milk Market Factors to Watch in 2018

November 29, 2017 12:32 PM
 
milk_istock

As the end of the year approaches, all eyes are on 2018 milk markets. What are the biggest factors you should watch going into the New Year? Tiffany LaMendola of dairy consultancy Blimling and Associates outlined the five milk market factors they are watching at the 2017 California Alfalfa and Forage Symposium this week in Reno, NV.

 

#1 – The European Union. Because the lid has been taken off of milk production in the EU, dairy farmers there have been increasing output over the past several years. LaMendola says EU milk production is 6.8 times larger than New Zealand’s milk production and it continues to grow. September milk production in the region was up 4.3%.

 

#2 – U.S. Milk Production. Milk produced by American dairy farmers has also continued to soar. Production was up nearly 2% in September and 1.4% in October. According to LaMendola, most forecasts expect it to continue despite the first drop in month over month dairy cow numbers in at least a year from September to October.

 

#3 – Dairy Producer Margins. LaMendola says on-farm margins don’t look terrible on paper, yet. While that doesn’t match most farmer sentiment, she says it’s important to note that margins are extremely regional. California continues to show a decline in milk production which she says is the result of negative margins.

 

#4 – Demand. Domestic demand is not helping milk prices, LaMendola says. While dairy fat had boosted domestic demand for several months, that seems to be flattening out. Yogurt, which was once a huge driver of domestic milk demand has also flat lined, she says. It’s no surprise that fluid consumption continues to decline. While export sales have held up over the past year, she says export sales are not enough to prop up milk prices because of the global oversupply of milk.

 

#5 – Inventories. Milk markets are suffering from an unbalance of supply and demand. LaMendola says massive stocks of dairy products around the world are putting pressure on prices. Not only is there a global glut of milk, but milk powder stocks are soaring as well. While cheese has been trading in a range, she says it’s recently been under price pressure.

 

   

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Comments

 
Spell Check

Mark
Athens, PA
11/30/2017 10:56 AM
 

  If all the farmers would cut back production this would be a big help or have the milk co ops put a limit on how much the farmer can ship. If deman goes up so should prices like back in 13&14

 
 

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