Will milk production be able to keep up if demand improves in H1 of 2024?

As already discussed in our previous insight ‘How much export supply is still required for the global dairy market?’ most key exporting regions struggle to increase or even maintain their current milk production level. Weather disruptions, sustainability constraints in government policy and still unfavourable margins at farm level have brought milk production in the key exporting regions down to 0% growth in recent months. In previous decades, similarly weak production growth rates would have pushed dairy commodity prices to elevated levels. However, because global demand has been equally weak this year, prices have been relatively low for most of the year. If we now assume that demand can only improve from this point onwards, the next question becomes: will supply be able to keep up?

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