According to Rabobank, the outlook for 2025 is very positive for the global dairy scene.

Even though the bank expects to see milk volumes from the seven largest exporting regions to increase by 0.5% for 2025, this is just offsetting the 0.5% reduction in supply experienced in 2023.

It says that cheap feed and good prices will drive on milk volumes. Importantly, it is also expecting that animal health issues in Europe and the US will be solved with vaccines.

In 2024, we saw that milk supplies in these regions declined due to bluetongue and avian influenza.

On China, the bank said that it expects that milk production in China will have decreased by up to 5% in the second half of 2024 and that this reversal of supply growth will continue into 2025, but at a reduced rate, expecting supply to be back by 1.5% compared with 2024.

Low morale

The reason it gives for the decline is an intense heatwave, but, possibly more importantly, low milk prices and low farmer morale in China, leading to smaller farms exiting the sector.

Rabobank says that milk supply in New Zealand in 2025 is going to grow at the highest rate compared to all other exporting regions. It expects milk supply growth to be up 3% for the New Zealand season ending on 31 May 2025.

For Europe, the bank is predicting an increase in supply of 0.5% in 2025 compared to 2024.

For countries such as Ireland, if farmers get the bounce of the ball in terms of weather and grass growth, the increases should be over 2%.