Brace for Global Milk Scarcity, New Rabobank Report Predicts

Sep 28, 2012

Tighter Supplies Driving Up Milk Prices Worldwide

Rabobank released a new report - Q3 2012 which examined the global dairy industry looking at supply and demand of key markets. The report finds that global dairy markets are heading into a period of supply scarcity for 2013. The report identified several key factors driving this new development including, low milk prices, high feed costs and extreme weather conditions all being contributors to lower production.

“We fear that much of the market has been lulled into a false sense of security by the phenomenal growth seasons we saw in late 2011 and early 2012 – with the next 12 months likely providing a rude awakening,” the report stated.

Rabobank projects a reduction in exportable surpluses coming from the “Big Seven” export regions – EU, U.S., Australia, New Zealand, Brazil, Argentina and Uruguay to the end of 2012 and first half of 2013. The report concludes that as economies such as China, Southeast Asia, and Middle Eastern/North African countries improve, the demand to buy more dairy will rise.

“The bright light for dairy producers and a fulcrum for recent price recovery on world markets has been the ongoing strength of import demand, and we expect import demand to continue to expand in the coming six months.”

Video: Evolution of Beef Cattle Farming

The Clear Conversations podcast took to the road for a special episode recorded in Nashville during CattleCon, bringing listeners straight into the heart of the cattle industry. Host Tracy Sellers welcomed rancher Steve Wooten of Beatty Canyon Ranch in Colorado for a wide-ranging discussion that blended family history and sustainability, particularly as it relates to the future of beef production.

Sustainability emerged as a central theme of the conversation, a word that Wooten acknowledges can mean very different things depending on who you ask. For him, sustainability starts with the soil. Healthy soil produces healthy grass, which supports efficient cattle capable of producing year after year with minimal external inputs. It’s an approach that equally considers vegetation, animal efficiency, and long-term profitability.

That philosophy aligned naturally with Wooten’s involvement in the U.S. Roundtable for Sustainable Beef, where he served as a representative for the Colorado Cattlemen’s Association. The roundtable brings together the entire beef supply chain—from producers to retailers—along with universities, NGOs, and allied industries. Its goal is not regulation, Wooten emphasized, but collaboration, shared learning, and continuous improvement.