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Rabobank expects an easing of global milk pricing from mid to late Q2 2014, according to its Q2 Dairy Quarterly report. Exportable supply rose strongly in Q4 2013 and is expected to continue into early 2014 as producers respond to improved margins through high milk prices and falling feed costs. A strong Northern Hemisphere production season, on the back of an exceptional season in the Southern Hemisphere, should generate more than enough exportable supply to exceed China’s extraordinary additional needs from the world market, loosening the market somewhat. However, the rate of price reduction will be limited by structural constraints on suppliers, the need to replenish depleted buyer inventories and ongoing demand growth in line with a slow economic recovery.
