Global Dairy Quarterly Q1 2021: Strength Ahead of Northern Hemisphere Flush
As we reach the one-year anniversary of when most of the world went into lockdown for the first time, the view of the future is clearer and more hopeful than it has been for months. By mid-year, there should be a palpable return to familiar consumer patterns. It won’t be immediate, and it won’t be without some bumps along the way, but on balance, it should be positive for dairy markets.
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Rabobank forecasts a 1.1% increase in milk production across the Big-7 dairy-producing regions in 2021. This is a decrease compared to the 1.6% YOY increase in 2020 and represents a modest tightening of supply, which should help support markets, as demand settles into post-vaccine balance.
“China’s near-term import demand is elevated, but is expected to slow in the second half of the year. High domestic milk prices are driving interest in expanding domestic milk production, which could reduce import needs in the future,“ according to Ben Laine, Analyst - Dairy.
Shipping woes are causing headaches for exporters around the world trying to move commodities internationally. Strong demand for consumer goods coming out of China is driving robust demand for containers at Chinese ports.
Demand will be in the driver’s seat in 2021. Throughout the pandemic, global milk supply has been much less impacted than demand. Disruptions arose as consumers made significant shifts in their consumption patterns, which spilled through supply chains. Most of those shifts were abrupt and severe as we entered the crisis, but coming out should be much more gradual.
Most economies will grow in 2021 compared to 2020. Rabobank is forecasting a 4.5% YOY increase in global GDP for 2021, compared to a -3.8% contraction in 2020. The impact of widespread vaccination should be felt by mid-year, which will be positive for economic activity.
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Where to go from here
Ben LaineAnalyst - Dairy
Andrés PadillaSenior Analyst - Beverages, Dairy, F&A Supply Chains Read more
Mary LedmanGlobal Sector Strategist – Dairy Read more
Richard ScheperAnalyst - Dairy Read more
Sandy ChenSenior Analyst - Dairy
Shiva MudgilAnalyst - Dairy, F&A Supply Chains Read more
Emma HigginsSenior Analyst - Dairy Read more
Daniëlle DuijndamAnalyst – Dairy Read more
Michael HarveySenior Analyst - Dairy Read more