Dairy experts anticipate a gradual but sluggish recovery in major global dairy markets in 2024, with Europe projected to be down in the first half of the year, New Zealand flat after four to five years of loss, and the US weak in the first quarter. Weather, tight business margins, and sustainability and regulatory challenges that affect production all contribute to a decrease in milk supply. The United States has had seven straight months of decreasing output, with milk cow numbers at their lowest since 2019.
Despite the low supply, dairy researcher Lucas Fuess does not anticipate the market to move bullishly. The theme for 2024 is gradual but consistent price rises as demand strengthens and tightness persists. The positive is the promise of increased profit margins if milk prices rise while feed costs fall. Class IV milk (used for dairy products such as butter, dry goods, and evaporated or sweetened condensed milk) is predicted to be more expensive than Class III milk until 2024 owing to increased cheese output.
Despite reduced milk availability, milk is predicted to flow freely to cheese processors owing to the industry’s rapid expansion, with new cheese facilities coming this year and in 2025. However, large supplies of cream from cows producing a lot of milk were unable to keep global butter prices down, which have hit record highs many times in recent years and are expected to reach new highs in 2024. Nonfat dry milk prices have remained rangebound for many months, despite stockpiles reaching their lowest levels since 2015.
