The outlook for milk prices and dairy farmer incomes remains positive for 2024, according to Richard Scheper of Rabobank.

A combination of tight milk supplies, a low carry-over of stock and improved demand has helped to underpin the lift in dairy commodities, Scheper said.

“We should not be over-optimistic, but in general the outlook is good. 2024 will be a more profitable year [for dairy farmers] than 2023 was, especially compared to the second half of the year,” he predicted.

“Overall, milk prices are on the way up across Europe,” Scheper said.

“There are limited stocks of dairy commodities and markets remain tight. We have seen over the last few weeks butter prices on spot markets reaching over €6,000/t,” he explained.

“However, we have seen little volume being traded at this price level,” he added.

The absence this year of an overhang of product has also helped to drive on markets, Scheper maintained.

“Last year we really started the year with elevated stocks, that is not the case at the moment,” he said.

“On the demand side, we see light at the end of the tunnel. We’re not seeing big steps but minor steps in the right direction,” Scheper said.

The trade has also been helped by improved sentiment on export markets, the Rabobank dairy analyst stated.

He pointed out that the continuing conflict in the Red Sea has opened up increased export opportunities for European dairy produce in north Africa.