Spring has been slow to come to Europe and as a result milk production continues to trail behind last season in the majority of the larger dairy producing countries. Milk prices are also not high enough to incentive production. However this is likely to soon change. Farmgate milk prices will follow commodity prices up, and the good news for northern hemisphere producers is that feed prices look set to move in the opposite direction. Corn supplies in the US are higher than previously anticipated and prices are tipped to continue to soften. Should we see an increase in farming profits then we can expect to see a relatively rapid increase in output in the US and a similar albeit slower response from European producers.
The milk producing seasons are rapidly drawing to a close in New Zealand and Australia. Here drought has slowed output considerably with many farmers opting to pull-the-pin on this season early in order to set themselves up for a better start for the next season. Pastures are beginning to grow now that rains have come to most areas but it will take some time for feed supplies to rebuild to adequate levels.