Southeast Asian nations and China are touted to be big markets for dairy products from the USA, stated a dairy analyst from Rabobank
On the whole, the global need for milk will hit 20.4bn litres by 2020. Specifically, China will need an additional 3.1bn litres and Southeast Asia 2.72bn litres by the same year. By such time, the USA is well placed to cater to the growing demand for milk.
Even though the current price in the international dairy trade circles rival the lows of the 2009 crash, the fundamentals of strong dairy demand remain, and USA is in a good position to fill the demand.
Rabobank dairy analyst Hayley Moynihan said that the long term prospects for dairy exports are “exciting” and the total global demand will go up. It is expected to increase global traded volumes by 20mn tonnes (liquid milk equivalent) to 100mn tonnes.
While USA remains a major producing hub, New Zealand’s rapid growth in milk production is beginning to get challenged, and it has lost its lower-cost advantage. The main reasons are difficulty in procuring land, labour, water and the increasing cost of environmental regulations. The relatively softer constraints include negative public opinion and resistance to change, added Hayley.
