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Press release

April 6th2016

Rabobank Global Dairy Quarterly Q1 2016:Dairy Demand Fragile but Growing

The global dairy market outlook will remain weak throughout 2016, but with

more upward pressure on prices as we head into 2017, according to the

Rabobank Global Dairy uarterly 1 2016 report!

Global dairy commodity US dollar prices have continued to stumble along a market

floor largely determined by the level of EU intervention support. The short-term

outlook remains pessimistic. In the face of a cripplingly long price trough entering

2!"# production gro$th in the $orld%s milk production regions has continued to

slo$.

&'ooking for$ard# the ne$s is by no means all bad for the dairy industry(# says

)evin *ellamy# +abobank%s Global ,airy Strategist. &ith the eception of *ra/il0

gripped by the $orst recession in a generation0+abobank sees dairy consumption

continuing to gro$ in 1sia# as $ell as in the US and EU.( +abobank epects that#

throughout 2!"# slo$ing production gro$th $ill be matched by slo$# but steadyconsumption gro$th in most main eport regions.

Regional outlook

In Europe# lo$ farmgate prices $ill mean production gro$th $ill slo$ as

farmers focus more on cost-saving than epansion. o$ever# $hile European

production gro$th $ill moderate# production levels $ill not fall# re3uiring the

$orld market to find a ne$ pricing balance.

The 2!45!" season production in 67 $ill be higher than epected due to

increased summer rainfall. US farmgate prices are likely to move do$n in response to $eakening trade

balance and gro$th in inventories.

orse-than-epected production in 2 2!4 has led us to cut our 8hina

production forecast for 2!".

9roduction continues to contract in 1rgentina and *ra/il# as very high feed

costs keep farmers: margins under intense pressure.

Rabobank Nederland

Communication Department, PO.o! "#"$$, %&$$ 'G(trec)t, tel. *%" +$%$ -" -#&/,presso0ce1rn.rabobank.nl

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The current season $ill be mostly break-even for 1ustralian producers# $hile

margins $ill also be tight.

"or more in#ormation$

9lease contact the report%s author;

)evin *ellamy; )evin.*ellamy! > ?!2!@>

Aor other information please contact +abobank press office;

Badelon.)aspers! "!@@?2CC

Aor your social media ready version of this press release;

http;55rabobank-food-agribusiness-research.pressdoc.com

Dr visit; $$$.rabobank.com5fa and$$$.A1+.com

Aollo$ us on T$itter;

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information# please let us kno$ and $e $ill remove your email address

promptly.

"or more in#ormation$

9lease contact the report%s author;

)evin *ellamy; )evin.*ellamy! > ?!2!@>

Aor other information please contact +abobank press office;

Badelon.)aspers! "!@@?2CC

Aor your social media ready version of this press release;

http;55rabobank-food-agribusiness-research.pressdoc.com

Dr visit; $$$.rabobank.com5fa and$$$.A1+.com

Aollo$ us on T$itter;