Global Dairy Quarterly Q3 2020: A Delicate Rebalancing

Milk production growth across the major export engines will continue expanding into 2021, a feat not matched since 2018. Despite the disruptions Covid-19 brought to global dairy markets, farmgate milk prices have been resilient. A 1.3% YOY increase in production is expected across the big-7 dairy regions in Q4 2020, a 1.0% in 1H 2021, and 0.8% in 2H 2021.

Commodity prices rallied in Q2, largely on the back of government support. However, the outlook for government support is less certain in Q4 and into 2021, elevating the risk of downward price pressure.

“We observe sequential improvements in foodservice, as more regions have come out of lockdown, while retail dairy sales show early signs of deceleration. It will take time for foodservice demand to return to pre-Covid-19 levels, even for countries that have been well ahead of the curve,” according to Sandy Chen, Senior Analyst – Dairy at Rabobank.

Rabobank expects global market fundamentals to remain weak into Q2 2021, at which point the level of exportable surplus retreats in 2H 2021, as domestic consumption improves.

  • Sandy Chen

    Senior Analyst - Dairy
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  • Mary Ledman

    Global Sector Strategist – Dairy
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  • Andrés Padilla

    Senior Analyst - Beverages, Dairy, F&A Supply Chains
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  • Tom Bailey

    Senior Analyst - Dairy
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  • Ben Laine

    Analyst - Dairy
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  • Saskia van Battum

    Analyst – Dairy
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  • Daniëlle Duijndam

    Analyst – Dairy
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  • Richard Scheper

    Analyst - Dairy
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  • Emma Higgins

    Senior Analyst - Dairy
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  • Michael Harvey

    Senior Analyst - Dairy
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  • Shiva Mudgil

    Analyst - Dairy
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