Milk prices are unlikely to pick up until later this year, but the El Nino weather pattern could provide some support by curbing production.
Despite talks of a slowdown, global milk production continued to grow throughout the autumn, with New Zealand, US and European supplies up by 2%, year-on-year, according to Nick Holt-Martyn at The Dairy Group.
In October, production among the five main dairy exporting nations was up 2.5% on the year, and this is forecast to average 1.5% over the next three to six months.
“With global milk supply still growing, particularly within the EU, there is little prospect for a recovery in dairy markets and farm gate prices to herald the new year.”
However, the Pacific region was experiencing the biggest El Nino event for nearly 30 years, which was expected to result in more extreme weather across the world, including Europe.
“The most likely scenario is for markets to remain subdued for the next three months, then for low prices and weather to provide a brake on supply leading to a modest recovery in the autumn.”