Milk market review 2024 [Global Report]

In 2023, the global dairy market began to stabilize, with production increasing slightly in the EU and the US, but declining in the drought-stricken countries of Oceania and South America. Despite weak demand, which was exacerbated by economic uncertainty and high inflation, particularly in Western Europe and China, the market showed signs of recovery towards the end of the year. Looking ahead to early 2024, the market expects gradual normalization of prices, supported by stable Chinese imports and potential improvements in global demand conditions.

Q1 2023

At the beginning of 2023, global milk production recorded a moderate increase, emerging from a period of decline that lasted until the end of 2022. This was partly due to production increases in the EU and the US, offset by drought-related declines in Oceania and South America.

Demand for dairy products was mixed. While the US market remained robust, other regions such as Western Europe and China recorded declining sales figures. High food price inflation and the economic slowdown contributed to consumers spending less on dairy products worldwide.

Input costs for dairy farms have fallen slightly due to more favorable grain prices, which means some relief on the cost side despite falling milk prices worldwide.

Q2 2023

The market continued to experience weak demand for dairy products globally, exacerbated by economic pressures and high inflation affecting consumer purchasing power. The situation was particularly pronounced in developed markets and some key emerging markets.

Growth in milk production was sluggish, exacerbated by logistical challenges and weather-related disruptions in some regions. There was no significant recovery in production or demand during this period.

Q3 2023

The dairy markets remained under pressure due to low demand. High costs and price volatility remained a challenge for the sector and affected the dynamics of global trade. To cope with weak demand, the focus was on managing supply chain efficiency and cost containment.

Consumer confidence remained low, which had a negative impact on purchasing behavior in several key markets.

Q4 2023

The quarter was characterized by cautious optimism on the dairy market, which is moving into the next phase of the cycle. Prices showed the first signs of a slight recovery from their lows, although general market sentiment remained cautious due to ongoing geopolitical tensions, energy market volatility and weak macroeconomic conditions.

Supply growth was limited and reflected the structural weaknesses in production in the most important export regions. This was accompanied by slightly improved, but still sluggish demand.

Early 2024 Outlook (Q1 2024)

It is expected that commodity prices on the dairy market will slowly return to their long-term averages. However, the recovery path is subject to potential volatility due to ongoing risks such as geopolitical instability and weather fluctuations or the avian flu epidemic.

Chinese dairy imports are forecast to stabilize, providing an important market for Oceania’s export-oriented dairy industry. This stability is seen as a positive sign that could lead to price improvements from a low level if global demand conditions improve.

Global Reports from Foodcom S.A.

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