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Outlook for dairy farmers in 2025
Farmer's Weekly
|March 14, 2025
The sharp increase in feed prices in 2024 resulted in weak profits for dairy farmers. Conditions will probably improve slightly during 2025, writes Dr Koos Coetzee.
This article looks at the demand for dairy, the cost of producing these products, and price trends.
INTERNATIONAL SITUATION
Six countries supply the bulk of dairy products traded globally. The changes in annual milk production in these countries are shown in the table below.
Total production recovered from the low levels of 2023. At the end of November 2024, total milk deliveries in these countries were 0,8% higher than in the period to November 2023, but still 0,7% down on November 2022.
Dairy product prices decreased sharply from the 2022 post-COVID-19 peak. From June 2022 to September 2023, the dairy price index of the United Nations' Food and Agriculture Organization decreased by 30%. Since then, prices have recovered by 24%. The December 2024 index is however still 12% lower than the 2022 peak.
In rand terms, milk powder prices remained stable during 2023 and 2024. Butter prices increased sharply during 2023 and 2024 and reached an all-time record of more than R140 000/t mid-2024. Thereafter it decreased to R110 000/t.
SOUTH AFRICAN SITUATION
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