Rabobank Analysts Warn of Animal Disease Risks and Milk Market Uncertainties in Europe

Animal health concerns are on the rise, with Rabobank analysts voicing serious warnings about potential outbreaks of foot-and-mouth disease in Germany, Slovakia, and Austria. Additionally, the bluetongue virus could resurface as early as September, with current vaccinations offering only limited protection.

Manure Disposal Challenges Loom in the Netherlands

While RaboResearch maintains a cautiously optimistic outlook for the Dutch dairy sector, the report highlights a growing concern about manure management. Much of the manure disposal capacity has already been used, indicating that storage and flexibility will be critical in the second half of 2025.

“Manure disposal is becoming a bottleneck for the dairy industry. Producers will need robust storage capacity to stay resilient,” analysts note.

Dairy Demand Solid but Economic Headwinds Ahead

European demand for dairy products remains stable, yet disappointing economic performance — especially in Germany — may dampen consumer spending during the autumn and winter of 2025.

Rabobank forecasts that Eurozone economic growth will likely be revised downward from 1.3% to 0.9%, a shift that could impact broader dairy consumption patterns.

Global Market Sentiment Weakens

Uncertainty extends beyond Europe. In the United States, consumer confidence has fallen to a historic low, while China continues to grapple with economic challenges. Dairy product sales are also declining in several other global markets.

Milk Prices Hold Steady — For Now

The average milk price across Europe is expected to reach approximately €54 per 100 kg in 2025. However, a slight price decline is anticipated in the second half of the year, tied to seasonal shifts and market rebalancing.

Despite attractive feed prices and improved profit margins, European milk supply has lagged behind expectations so far this year. However, production rebounded in April, and total milk output is projected to increase by 1% by the end of 2025 — largely driven by growth in non-EU producing regions.

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