Philipp Goetz, Head of Sales and Business Development at IFCN (International Farm Comparison Network), described current market developments at today’s online event “IFCN Global Dairy Tech Mapping 2024”. According to IFCN calculations, the global average milk price in 2023 (generated purely through sales on the global market) was 39.8 US cents, 25.5% lower than in 2022. Compared to the period 2019 to 2021, there was a marginal increase of 0.4%. Gietz sees the reasons for the significant price decline in an imbalance between supply and demand, global inflation and the slowdown in economic growth. According to Mr Goetz, the 1.4% drop in milk deliveries worldwide resulting from the fall in prices, rising input costs in milk production and the bad weather could certainly have been more drastic.
There are currently signs of a recovery in the markets and milk prices. However, according to Goertz, this will not lead back to a level comparable to 2022. Two scenarios are conceivable for Goetz:
A soft landing at a price level of around 45 US cents per litre of milk
or a continuation of the rollercoaster ride of milk prices down to below 30 US cents, followed by a recovery towards the end of the year to over 55 US cents.
Scenario 1 is probably the more likely, according to Goetz, as there is a global shortage of raw materials and the global economy is improving again at the same time.