According to Freshagenda’s latest Global Dairy Directions (GDD) quarterly outlook, global market fundamentals have started to weaken but remain mostly supportive of prices. Elevated commodity prices – driven by both the tightness of the domestic EU market, and China’s stronger demand which drove a higher involvement in GDT events – will continue to unwind.

The expected continued slow growth in EU-27 milk production should keep fat and protein values relatively stable. Feed prices have eased a little and a more normal summer is forecast across Europe. The strong growth in US milk output will be a factor for much of H2-2021 and will continue to affect global SMP and (possibly) cheese prices if domestic demand doesn’t recover quickly. The worsening drought in the west of the US could slow output more quickly, but farm margins will get better and no sudden fall in cow numbers is on the radar.