News

Dairy prices have potential to rebound

 

 

A dairy analyst is bullish on the second half of 2018 for dairy markets.

Nate Donnay with INTL FCStone tells Brownfield the dairy economy is rough, but there is hope, “These low dairy prices are going to slow milk production worldwide. The general outlook on global demand is actually pretty good, and so for the second half of the year, we are expecting prices to rebound a bit.”

He adds major price swings in dairy markets might be a thing of the past now that Europe has done away with their quota system, “Those farmers are able to respond to positive margins and boost milk production in a way that they haven’t been able to in the past 30 years. That’s going to be a long-term thing that limits the upside for dairy prices globally.”

In the meantime, Donnay says Michigan dairy farmers and others in the region are suffering, “The Great Lakes have had it particularly hard. The milk price basis has weakened quite a bit, particularly for Michigan. They’re suffering more than other parts of the country. It’s definitely creating financial stress. We continue to see farms liquidating.”

Donnay was interviewed at the Great Lakes Regional Dairy Conference in Mt. Pleasant, Michigan.

AUDIO: Interview with Nate Donnay