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Market holds promise for dairy sector

Market holds promise for dairy sector
Feedstuffs talks with Rabo AgriFinance dairy analyst Ben Laine at World Dairy Expo about the dairy market and what's likely ahead.

Improved prices appear likely for the dairy sector in the coming year, according to Ben Laine, dairy analyst for Rabo AgriFinance.

Laine told Feedstuffs during the 2019 World Dairy Expo in Madison, Wis., that the strengthening of prices will largely be due to flat milk production.

“I think the fact that production is being held back is going to help strengthen prices going into next year. Things are looking pretty positive on that front,” Laine said.

The only downside risk, according to Laine, would be a turnaround in the consumer economy. If there's a recession, that's something to be watching out for, he said. “Luckily, dairy tends to not be hit quite as bad as some other sectors,” he added.

As for trade, Laine said uncertainty is the new norm. “We have to start to get use to the uncertainty that comes with trade,” and unfortunately, even though a lot of these issues don't start with agriculture, the agriculture industry is kind of an easy target for that in a lot of ways, he said.

It's a matter of continuing to look at how the dairy industry can find new opportunities, Laine said. There are some cases where trade disputes in other parts of the world are opening up potential markets for the U.S., so the industry needs to stay on top of the changes, be agile and look at new markets as well as try to figure out how to get back into markets that it might be losing, he said.

Listen to the full interview.

TAGS: Markets
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