Dairy sector likely to feel indirect effect from Russian invasion
A dairy analyst says the U.S. dairy industry could see indirect impacts from the Russian/Ukrainian war.
Ben Laine with Rabobank tells Brownfield sanctions have been in place on U.S. dairy products since 2014, so exports aren’t likely to be impacted by the current conflict. But, “Feed/fertilizer is a major factor,” he says. “As we see more refugees moving into Europe, there’s potentially demand impacts.”
And he says while China’s demand for dairy has been slowing, if they become involved in sanctions related to the conflict there could be ripple effects throughout global dairy supply chains.
“Maybe backing up product in New Zealand that might not make it to China—that might lead New Zealand to switch from whole milk powder to skim milk powder and butter for example which would be more impactful to the U.S. and the EU,” he explains.
Rabobank’s latest quarterly report calls for nearly a one percent production decline in major milk-producing regions of the world for the first half of this year given the current economic climate.