Demand for dairy products worldwide will reach record levels by 2024, and prices will continue to rise.

According to a study by the analytical company Statista, in 2024, the average consumption of milk, dairy products, and eggs per person in the world is expected to be 56.4 kg. The global revenue from the sales of these products is projected to exceed $1.17 trillion, with a large portion going to India with $173 billion. 

Among other leading countries named are China, the US, Germany, and Russia. It is predicted that demand will grow most actively in countries with low income levels, including India, Pakistan, and some African states.

 The increase in population income will contribute to an increase in demand for these products. Due to inflationary pressures, private label products are becoming increasingly popular. 

Although offline sales will remain the primary sales channel, the share of online sales is expected to increase. Analysts forecast a significant rise in cheese prices, while the cost of other dairy products will vary within inflation rates. A recent Rabobank study points to a gradual but steady increase in dairy product prices in 2024. Lower feed costs will lead to improved profitability, which will ultimately increase milk production in G7 countries by the end of 2024. 

2024 is likely not to be a year of historical price peaks, but farmers worldwide anticipate a return to profitability, analysts note. Rabobank forecasts a decline in production volumes in the first two quarters of this year compared to last year before positive trends begin to show in the second half of 2024, thanks to more favorable conditions. 

The recent decline in milk production has been partially offset by weak global demand. However, low dairy product inventories in the market globally mean that any changes in supply or demand could lead to price increases for end consumers. In Russia, milk consumption increased by 5% last year after a 1% decrease in 2022, according to data from the CEO of the National Union of Milk Producers, Artem Belov. This is the highest figure in the last 10-15 years. 

Milk production and exports are also steadily increasing. It is projected that production volume will increase by 4% to 8 million tons, and exports by 15%. The growth of exchange-traded goods such as skimmed milk powder and whey is particularly noticeable. Belov also noted that dairy product inventories in the domestic market are normalizing, and prices for agricultural producers are stabilizing. 

The head of the union expects further growth in milk and dairy consumption in 2024, as well as the continuation of positive export dynamics. Alexey Voronin, Director of the Analytical Department of the National Union of Milk Producers, reported that in 2023, per capita consumption of dairy products increased by 3% to 249 kg per person per year, the highest level in the past 28 years, nearly matching the 1995 level. Gross consumption in the trade sector (excluding home-produced goods) increased by 5%, reaching 31.2 million tons. 

The demand growth is noticeable on almost all types of dairy products, including traditional dairy products and milk-intensive products such as cheese and butter. However, demand for cheaper products with vegetable fats is declining. Voronin also noted that the increase in production costs will restrain demand in the medium term.