Dairy: Growth Will Continue, Exports Remain a Wild Card

Global dairy commodity markets likely reached their bottom in 2023, and the general trend is for prices to move higher in 2024. Demand will be key.

The upside potential for dairy demand faces some uncertainty moving into the new year. Dairy product sales should grow, led by cheese, butter and yogurt. However, that growth will be at a slightly slower pace as U.S. consumers will be pressured by reduced household savings, growing credit card debt and higher interest rates. Ultimately, the wild card is international demand as the world’s growing middle class craves more high-quality proteins. If global dairy demand picks up, the U.S. is poised to fill orders as the other major dairy export regions all show signs of static milk production growth. Lower feed costs and improved cow productivity should spur additional U.S. milk production.

EDITOR’S TAKE:

All signs point to growth in both domestic and international demand for U.S. dairy products. Don’t underestimate the power of a slightly lower U.S. dollar relative to other world currencies. That, in combination with the high quality of our products, is a formidable package. Dairy prices are forecast to rise in 2024, adding to the margins at the farm level. Dairy production takes place in virtually every state, so make sure you are providing the farmers/ranchers in your area with the best service and parts for their existing vehicles. When they are visiting your dealership, also ask when they will be looking to upgrade to a new model – you might be surprised at the answer!