Dairy Optimism for the Second Half of 2024

Dairy prices have been low for some time, giving producers several reasons to lack optimism for the second half of 2024. Lucas Fuess, the senior dairy analyst for Rabo AgriFinance, says the industry needs to get through the next few months first.

“We've got to get through the spring flush period over the next few months, of course, the peak milk-producing months of the year for the US.”

Looking ahead to the second half of the year, there are a lot of factors that will influence dairy prices.

“The economy continues to chug along here in the U.S. We've avoided what we thought was the worst-case scenario of entering a recession so far, and we're optimistic about the health of the consumer into the back half of the year. In addition, looking at exports to Mexico, that has been a pretty bright spot as well even though I mentioned exports somewhat struggling a little bit, Mexico has been a really good market for us.”

“There are a variety of things that could come together to make the back half of this year, the second half of this year, a period to look forward to, if you will, for farmers in the coming months. It was just 18 months ago, in mid-2022, that we saw some of those record-high milk prices. It's easy to get discouraged in times like this when we've got challenges from all angles. But looking ahead, the U.S. is very well positioned, especially when considering other key dairy exporting places around the world. Places like the European Union and New Zealand, over the long term, we see milk production getting challenged in those regions, and we still see growth in the U.S. over the long term.”