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Dairy Market Volatility Continues

Weather, supply chain issues and rising demand from developing countries spell volatility for dairy prices.
July 9, 2013

CHAPEL HILL, N.C. – According to speakers at the INTL FCStone Dairy Outlook Conference held last month in Chicago, dairy prices will remain volatile for the near future, the result of global weather, supply issues in the feed markets and rising demand from developing countries, QSR Magazine reports.

“We’re seeing milk production increase in the U.S. with fewer cows and we’re estimating total U.S. production reaching nearly 201 billion pounds in 2013,” said Robert Chesler, vice president of FCStone LLC’s Food Division. 

“But keep in mind that water remains the greatest threat to growing dairy production and those developing countries need to solve some of their infrastructure issues before realizing those gains,” Chesler said. 

“This forecast calls for a growth rate of 1.8% per annum, well below the 2.3% growth rate of the previous decade resulting in higher prices. Consumption will increase at an average of 2.1% per annum based on robust international income growth, population growth, and further westernization of diets.”