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Analyst is concerned demand isn’t keeping up with world dairy supplies

A market analyst expects global dairy product supplies will go up, but he has concerns about consumer demand. 

Dan Basse is with AgResource Company. He tells Brownfield, “It’s a question of demand more than it is supply. Supplies will be up seven percent or one percent globally, but it’s demand that doesn’t look like it’s growing because of Central Bank intervention, a strong U.S. dollar, and maybe a consumer that just doesn’t have the purchasing power he did last year.”

As far as exports, Basse says the issues around the European Union’s Farm to Fork efforts will lower production from all EU farms, including dairies. “Farm to Fork of course is anti-nitrogen, anti-fertilization, anti-chemical. If they continue to move forward with that, dairies will be of a scarcer supply going forward.”

But Basse expects the U.S. will have competition filling the dairy demand left behind by the EU. “Oceania, which is our friends in Australia and New Zealand, they are having okay conditions, okay weather. Their milk production will be up, prices will be down, and that’s our real competition.”

Basse spoke to Brownfield during the recent Professional Dairy Producers business conference held in Wisconsin.