Rabobank analysts say substantial dairy product market slump unlikely

THE milk price outlook is unpredictable, according to the Dutch Federation of Agriculture and Horticulture.

Although the OECD and IMF are optimistic about consumer demand which would boost sales of dairy produce, there are also fears of a new economic downturn, especially in the eurozone.

Rabobank analysts said recent strong pockets of demand and sustained falls in milk production in export regions left the market indifferent to the EU sovereign debt crisis, Chinese attempts to rein in economic growth, and financial market jitters.

The second half of the year could well see improved product availability, but a substantial dairy product market fall appeared unlikely, according to Rabobank analysts.

Although EU milk output for the first four months of 2010 was 1.3% lower than 2009, total production of global export regions was estimated to have risen in April for the first time in nine months. “The supply tide is coming in, but that is likely to be a slow process, and could still be at least matched by demand-side improvements,” they said.


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