Press release

April 6th 2016

Rabobank Global Dairy Quarterly Q1 2016:

Dairy Demand Fragile but Growing
The global dairy market outlook will remain weak throughout 2016, but with
more upward pressure on prices as we head into 2017, according to the
Rabobank Global Dairy Quarterly Q1 2016 report.
Global dairy commodity US dollar prices have continued to stumble along a market
floor largely determined by the level of EU intervention support. The short-term
outlook remains pessimistic. In the face of a cripplingly long price trough entering
2016, production growth in the worlds milk production regions has continued to
slow.
Looking forward, the news is by no means all bad for the dairy industry, says
Kevin Bellamy, Rabobanks Global Dairy Strategist. With the exception of Brazil
gripped by the worst recession in a generationRabobank sees dairy consumption
continuing to grow in Asia, as well as in the US and EU. Rabobank expects that,
throughout 2016, slowing production growth will be matched by slow, but steady
consumption growth in most main export regions.
Regional outlook

In Europe, low farmgate prices will mean production growth will slow as
farmers focus more on cost-saving than expansion. However, while European
production growth will moderate, production levels will not fall, requiring the
world market to find a new pricing balance.
The 2015/16 season production in NZ will be higher than expected due to
increased summer rainfall.
US farmgate prices are likely to move down in response to weakening trade
balance and growth in inventories.
Worse-than-expected production in 2H 2015 has led us to cut our China
production forecast for 2016.
Production continues to contract in Argentina and Brazil, as very high feed
costs keep farmers' margins under intense pressure.

Rabobank Nederland
Communication Department, PO.Box 17100, 3500 HG Utrecht, tel. +31 (0)30 21 6 2758,
pressoffice@rn.rabobank.nl

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The current season will be mostly break-even for Australian producers, while
margins will also be tight.

For more information:

Please contact the reports author:
Kevin Bellamy: Kevin.Bellamy@Rabobank.com , Tel: +31 30 7121083

For other information please contact Rabobank press office:

Madelon.Kaspers@rabobank.com , Tel: +31 610887244

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Rabobank Nederland
Directoraat Communicatie, Postbus 17100, 3500 HG Utrecht, tel. (030) 216 39 04, fax. (030) 216 19 16,
pressoffice@rn.rabobank.nl