Dairy Industry

Report: Weaker 4Q growth to slow, but not prevent, dairy price recovery

Consumption has been weaker than expected

December 20, 2012
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Study says Americans opposed to government regulation of milk prices, production

Demand growth for dairy products will slow but not prevent a price recovery in 2013, according to a report released by Rabobank. Rabobank’s Food and Agribusiness Research and Advisory Council says that the slow recovery in dairy prices that began in August carried over to the final quarter of this year, but has failed to gain momentum as consumption remains weaker than expected and key buyers rely on market hedges. As a result, dairy production in key regions is expected to continue to fall below prior levels in the first half of 2013. “While consumption is likely to continue to grow at a slow pace into 2013, current forward coverage will provide buyers only temporary insulation from what we anticipate will be a worsening supply side situation. As such, the fundamentals still point toward a market tightening as we progress into 2013," says Global Dairy Strategist Tim Hunt. Request the full report from Rabobank.

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