Weak Chinese dairy demand makes economist nervous
A dairy economist says China’s latest dairy import numbers could be worrisome for prices.
Nate Donnay with StoneX tells Brownfield as the largest dairy product importer in the world, a nearly 30 percent decline in March imports by China could be devastating to prices if the trend sticks.
“They’re massive,” he says. “Every one percent change in China’s imports on an annual basis is about a one percent impact on global dairy prices.”
Hopefully, he says the March numbers are reflective of COVID lockdowns and not a new development in overall demand.
“But those logistic issues didn’t get any better in April and into early May here they’re still with us, and people tell me they’re going to be with us for a couple of months,” he says.
As a result, he says global dairy prices have dropped significantly in the short term, but if that spills into U.S. prices, dairy farmers could experience even tighter margins.