Trend reversal

Almost every day we can read something about the dairy market: sometimes there isn’t enough milk, other times there is too much. The appearance of China as a buyer turned the dairy market upside down. Meanwhile the system of milk production subsidies has changed in the European Union. The lifting of production quotas has rewritten farmers’ expectations, especially because the system of direct payments has changed: in the new EU budgetary cycle milk producers can apply for funding not for the milk produced, but for the cows giving the milk.

Due to the lifting of the quota, traditional dairy exporters such as the Netherlands, Denmark and Germany had to find new markets for their products. In addition to this, the Russian embargo also reduced the market. To make things worse, in the meantime Russia has started to invest in developing in agriculture and they don’t really need to import dairy products any more – in just 3 years the Russians tripled their dairy sector output. All in all, we can say that market demand is changing, together with dairy production and consumption habits. The dairy sector is undergoing a trend reversal. //

Házi Zoltán
vezérigazgató
Nagybani Piac