DAIRY MARKET ASSESSMENT - June 2008
International prices of dairy products have retreated 12 percent from their peak in November 2007, as measured by the FAO index of international dairy prices. Nonetheless, the index in April 2008 was still 25 percent higher than in April 2007. There is uncertainty as to where markets will head, however, as global trade in milk products is anticipated to fall again in 2008, constrained by reduced availability in the six major exporting countries, especially those located in Oceania, where the sector has again been impaired by drought, and those in Europe, where supply growth may be limited despite increased production quotas. At the same time, import demand has faltered under high dairy product prices, especially as several of the major importing countries have recorded strong increases in milk output. Global milk production, which is responding to the past year's high milk product prices, is forecast to grow by 2.5 percent in 2008.
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