The European milk price will peak in the third quarter of this year. This is what Rabobank expects in its monthly analysis of the milk market. After a milk price increase of 1.50c in Europe and the UK in May and June, only smaller price increases will follow in the summer months. These are the result of a strong upturn in the global dairy market since February this year due to high demand from China. However, Rabobank expects import demand from this country to fall by 18% in the second half of this year. Despite this decline, the dairy market seems to be able to maintain its current price level this year, with a price peak for basic dairy products in the third quarter.
For milk production in Europe and the UK, the bank forecasts an increase of 0.5% this year. Milk volumes in Germany, France and the Netherlands will remain stable or decline. In Italy, Poland and Ireland, milk production will increase. At the global level, milk production will be about 1% higher than last year, due to higher production in the USA and New Zealand.