Introduction

The consumption of dairy products has outstripped production in a number of developing countries over the last decade. The result has been a marked increase in exports out of the US, EU-27, New Zealand, and Argentina. But milk production is projected to hit record levels in 2011, and break that record in 2012.

Is demand growth strong enough in importing countries to absorb the increased supplies?

How far will prices need to fall to balance out the global market, and what impact will that have on US prices?

Demand functions are estimated for the largest importing countries with special attention paid to China. Baseline supply, demand, and price forecasts are developed for global dairy prices in 2011 and 2012. Sensitivity analysis is also conducted to simulate the impact on prices from faster/slower than expected production or consumption growth.

To learn more about the full report, contact:  Nate Donnay at 651.925.1060