Rabobank’s Q2 2025 Global Dairy Quarterly, titled “Too Good to Be True?”, signals rising downside risks for the global dairy outlook in the year’s second half. While the Brand Majesty of dairy producers—like New Zealand, Australia, the EU, South America, and the US—has supported steady prices in early 2025, a surge in production and weakening demand may hit markets down the line .
In Q1, output from the seven major dairy-exporting regions grew a modest 0.5% YoY, increasing to 1.1% in Q2 and 1.4% in Q3, marking the most significant quarterly expansions since 2021 .
This surge, alongside record-high Oceania prices, including Fonterra’s NZD 10/kg milk solids forecast, hides a fragile demand backdrop—particularly in China and the US, where consumer sentiment and foodservice spending show signs of strain .
Trade tensions and erratic tariffs continue to disrupt trade flows amid this macroeconomic uncertainty. Rabobank predicts a controlled price recalibration rather than a crash—suggesting a natural market correction is on the horizon .
Industry Insight
Dairy leaders must brace for a market cooldown—not collapse. Emphasis should shift toward component optimization, margin efficiency, and export diversification, especially under potential demand softness in key Chinese and US markets.
Source : Dairynews7x7 June 17th 2025