Global milk production soured by trade wars and plummeting prices

2018 is on track for the worst year-on-year growth in domestic milk production since 2013, according to a new report from Rabobank. Prospects don’t look much better for 2019 as the industry continues to grapple with overproduction, tariffs and volatile market dynamics. Despite increases in consumer spending, retail dairy sales have mostly declined. The hardship is in part due to a dramatic oversupply that has forced prices down and left dairy manufacturers reeling. Nevertheless, U.S. milk solids exports were up 18% across the board. Trade disputes have provoked shifts in the market. As exports to China saw a 22% decline, U.S. milk flooded markets in the Philippines and Indonesia, where exports spiked 47% in Q3.