Dairy markets currently present a striking
contrast from an Australian perspective.
Internationally, prices remain depressed;
the result of abundant supply and
lacklustre demand. Buyers in many
import markets have responded by
refilling supply pipelines, and are now
well stocked, with limited capacity to
commit further. Others believe prices
will remain depressed in the short
term, and consequently are buying on
an ‘as needs’ basis. Exports to key
global buyers China and Russia remain
well down in year-on-year terms. Milk
production has been slow to respond,
with most dairy export regions still
growing. Farmgate milk price cuts have
already occurred in both Europe and
New Zealand, which may go some
way to restoring the global balance,
but a significant and sustained uplift
in commodity pricing is considered
increasingly unlikely in 2015.