Optimism in the dairy sector despite challenges

The dairy industry presents a mixed picture worldwide, with rising milk prices and better availability of feed. According to RaboResearch, milk production in 2025 is expected to grow by 0.5% in the key export regions, marking a cautious recovery after a decline in 2023. Oceania leads the growth, driven by seasonal peaks, while other regions, including Europe, show more moderate increases.

Better margins thanks to higher prices and lower costs

Rising milk prices combined with lower feed costs are improving margins for dairy farmers. This creates opportunities for further production recovery in 2025. Vaccination programs in Europe and the US may help limit the impact of diseases like bluetongue and avian flu, although these remain a risk for milk production and fertility. In Northwest Europe, bluetongue continues to hamper production, while Ireland, after weak results in 2024, sees room for growth in 2025.

European dairy demand showing cautious recovery

European dairy consumption remains under pressure due to cautious consumer spending and tight margins in foodservice and retail. However, dairy price indexes have shown an upward trend since the second quarter of 2024, with rising prices for butter, cheese, and liquid milk. Optimism prevails in countries like France and Poland, where favorable weather and increased cheese production are contributing to growth.

With milk prices on the rise, such as FrieslandCampina’s guaranteed milk price, which increased to €55.50 per 100 kg in November, European dairy farmers are cautiously optimistic about 2025. However, the pressure on the manure market and the economic situation of consumers will remain key factors in the months ahead.

Rabobank.nl