1% (Less) Milk

Jun 17, 2022

Got milk? More and more producers these days are saying, “Well… not as much.”

In its most recent quarterly dairy report, Rabobank points to yet another decrease in milk production worldwide, with output falling 1.1% in the second quarter.

The dip this quarter makes 12 straight months of production declining globally. It’s the first time in a decade we’ve seen a skim—er, skid—that long.

Spoiled milk (production): Dairy is facing some of the same bad moos as other ag sectors: bad weather (especially in Oceania and South America), record-high feed prices, skyrocketing energy costs, and lower demand because of consumers’ deflated purchasing power (thanks, inflation). 

Soundbite: “The current slowdown in global milk output is directly related to higher costs of production and weather events. In the past, production has recovered and surpassed previous peaks, but now there are structural issues that could limit a significant rebound in production from some key exporters.” — Andrés Padilla, Rabobank senior analyst

Where this goes: Rabobank is predicting a potentially “less impressive recovery” in global milk production. With feed prices estimated to stay at record levels until (at least) mid-2023, plus ongoing weather crises, global herds have contracted, making a potential rebound slower.