Little hope of a milk price recovery for the rest of 2016
The light at the end of the tunnel has dimmed.
Last week I was at the IDFA Dairy Forum, the biggest annual conference for American and global dairy processors which was held in Phoenix.
The mood was pessimistic. There was general agreement that any recovery in milk price appears to be moving further back.
There are, of course, some factors providing upward pressure on global prices. The second season of low milk prices in New Zealand means that production is shrinking there and, by the end of the season, likely to be down by 7pc on last year. This will reduce the surplus on the world market.
US production is also likely to fall once the current price bubble around butterfat bursts. Given increased stocks and lower import prices, this seems imminent.
China is also consuming greater volumes of dairy as lower prices are passed onto consumers through discounting and internet offers, and growth in milk production on Chinese farms has reduced due to high price difference with international supplies.
This means that the stock piles are getting lower and China will need to come back to the world market later in the year.
The key downward price pressure is caused by the EU where production remains more than expected and will continue to be so through the winter.