Global dairy quarterly Q3 2024: Market narratives are shifting

Over the past three years, milk supply growth from the Big 7 exporting regions has been inconsistent, with only three quarters since 2H 2021 recording positive milk production growth. Factors like unpredictable weather, fewer cattle, and high feed costs have contributed to this struggle. However, recent improvements in milk prices and cheaper feed have boosted farmer sentiment and margins.

We expect supply from the Big 7 milk-producing regions to increase modestly over the second half of 2024, with 0.14% year-on-year growth forecast for the entire year. We project a 0.65% year-on-year supply increase for 2025, potentially surpassing the five-year average.

We expect China’s milk production to decline by 0.5% in 2025 due to economic pressures and lower demand, leading to a 12% drop in net imports for 2024 compared to 2023.

Despite mixed demand and retail price deflation in some regions, the global dairy market remains balanced but sensitive to changes. The next year could see significant shifts as production increases and markets adjust.