Russia and China saving dairy prices

ONLY vigorous buying by Russia and continuing strong Chinese demand are saving the global dairy market from a substantial price fall, according to Rabobank International’s latest global dairy report.

Russian and Chinese demand has been offsetting growth since May in global milk production, diversion of US products to the world market, and the sale of EU intervention stocks.

Rabobank sources said uncertainty remains high, but anticipated that the global dairy market will remain tight in 2011, because the current milk supply growth will be hindered, principally by higher feed costs and farmers needing to reduce debts.