According to latest estimates, global milk production across the key producing regions is expected to grow modestly by 0.25% in 2024 This is slightly higher than the 0.05% increase recorded in 2023. Although production is likely to increase, there is expected to be variability across key regions.
Overall, dairy markets in 2023 softened due to weaker underlying market fundamentals. There was an underwhelming milk supply growth in 2023 according to Rabobank. Disappointing Chinese import demand contributed to overall lack of movement on the demand side and lower prices than the previous year.
However, with some recent recovery in prices, even at fairly low levels, milk production is expected to see some growth in some of the key exporting regions with the exception of UK, Argentina and New Zealand. The US (1.0%), EU (0.3%) and Australia (0.6%) are forecasting some growth. The decline in herd size in the US, seen between March-October 23 is slowly stabilising and cow numbers are expected to increase in 2024 in response to the recovery in milk prices in US. Increase in milk volumes in EU will be supported by an increase in domestic and food service demand as reduced inflation and rising salaries increase disposable income.
Australia is likely to reverse some of the production losses in 2023 going into the new year. Firmer milk prices, coupled with good export demand, are likely to boost production.
On the other side, volatile weather conditions paired with weakening consumer demand are expected to drive lower production in Argentina. In New Zealand, the new conservative government budget will mean a cautious approach for farming and this will impact milk flows during the season. In the UK, production for 2024 is estimated to be 0.9% lower given tightening margins and lukewarm consumer demand.
According to Rabobank, prices are likely to firm up towards long-term averages in the first half of 2024. Considering the modest growth in production, returning demand will be necessary to drive the market. In addition, the continuing conditions (that could cause some weather challenges for Southern Hemisphere producers), China’s economic recovery, and geo-political instability in the Middle East are also other important factors to look out for in this year. 
