HighGround Releases Global Dairy Price Forecasts Through H1 2024

Overnight, our team of analysts released our January 2023 Dairy Commodity Price Forecast Report. Below you will find a summary of key global fundamentals impacting dairy markets but also included in this report are monthly price forecasts for CME block and barrel cheddar and CME butter, along with dry whey, WPC-34, nonfat dry milk, lactose, and Class III & IV milk, with price estimates through June 2024. To gain access to all of the in-depth global dairy analysis, request a free trial today. Already a customer? Head to the dashboard to check out our latest estimates and don't forget to sign up for todays' webinar.

From an incredibly wet Oceania, to a drought-stricken Argentina, Southern Hemisphere weather has been unfavorable for milk production in key regions. In the latest figures (Nov ’22), Australia’s milk production fell 9.7% from prior year, New Zealand dropped 1.7% and Argentina was down 2.9%.

The lack of incremental milk from Oceania did not spark supportive price action on Global Dairy Trade to close out 2022 as the auction continued to reflect bearish sentiment into the New Year as well – even despite strong purchasing behavior from North Asia. Lately, Southeast Asia has backed off and left North Asia with less buyers to contend with.

Recent reports suggest that overseas transportation costs are moving back to pre-pandemic levels. Transpacific ocean rates to the US West Coast have stabilized at 2019 levels for about a month now, and prices to the East Coast are just 12% higher than in December 2019 as demand and congestion ease.

A potential hiccup to global freight is the rapid spread of COVID-19 throughout China. For example, up to 70% of Shanghai residents are said to be infected. Freight booking cancellations are increasing at the ports of Shanghai and Shenzhen as “factories cannot operate properly due to a lot of workers getting COVID.”

There are two final fundamentals that will have an impact on market direction in H1 2023: First, global milk production will continue to strengthen into the first half of the year driven by the US and EU. Second, milk prices are starting to retreat as input costs remain elevated, which will lead to a discouraging H2 2023 for producers around the globe.

This is only a snippet of our comprehensive report. To read our complete analysis, including our option, request a free trial today!

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