World Dairy Situation 2009: The dark side of volatility

摘要

Over the past two years the dairy sector has experienced extreme situations. In 2007, milk prices reached a historical peak. In the middle of 2009 the milk prices in major regions fell to their lowest level for decades. Dairy farmers and dairy industry have been used to a stable unfluctuating price level. Now they have to learn to life with extreme fluctuations. Following euphoria in 2007 desperation is now observed. In 2008, more milk was produced than consumed. New stocks of milk products like butter and milk powder have built up and put pressure on the prices of dairy products. The intervention purchase prices - reduced by political decisions - became the benchmark for market prices, as in past. The demand has not recovered so far - as a consequence of the shortage of liquidity and the world wide recession. There are the first signs that the market forces work. In 2009, milk production will increase by the lowest growth rate for more than ten years. This is the main conclusion from the yearly questionnaire of the National Committees of IDF. The decelerated growth of milk production will help to bring the market in balance and clear stocks. After a period of liberalization, policy is back in the dairy market, trying to stabilize the market by the old instruments: export refunds and intervention. However, for a real turnaround an increase of demand is absolutely essential. In conjunction with the expected recovery of the general economy demand will return to its path of growth. The long-term prospects for the dairy market have not changed.