Doom and Gloom for dairy farmers
When you realise that this is just another load of uninformed guesswork from Rabobank You can breath a sigh of relief.
Rabobank's latest food and agribusiness research reports the prospect of a tightening marketplace largely driven by the supply side where low milk prices, extreme feed costs and unfavourable weather are expected to slow production in exporting countries.
Rabobank estimates that the FAO (Food and Agricultural Organisation) food price index will rise by 15% by June 2013.
But production from the major exporting countries is still higher than expected this year.
Although New Zealand milk producers thought it would be difficult to duplicate last year's production growth, that is exactly what is happening for the first part of their milk season.
Milk production there was up by 22% (three million kilos MS) to 16.7 million kilos for July.
Although this is less than 1% of their total annual milk production, it is sending a signal that production there may be higher again this year provided they are not affected by drought in the coming months.
In Australia, milk production is up by 2.9% in August, despite experiencing cool and wet weather.
In Argentina, production from January to July 2012 is up by 8.13% compared with the same period in 2011.
Production in Western Europe is slightly lower than last year but, in Eastern Europe, supplies are up in most countries with Poland's production up by 7% from the previous year.
Overall, EU July supply was down by 2.7% with falls of 9% in Germany, 2% in France, 4% in Britain and 1% in the Netherlands.
Both Russia and the Ukraine have also increased supplies by more than 2.5% from January to July.
Production is falling at present in the US because of the summer heat wave and high cost feed.
The US is still more than 2.77% ahead of supply compared with the January to August supply last year. August production for this year is down by 0.3%, however.
There is a big divergence in supply within that country with California down by 5.8% and Wisconsin up by 4.9% in August.
Source: Argentine Beef Packers S.A.