Cycles in the global milk market

The main purpose of this research is to analyze milk market cycles in major dairy exporting regions (European Union, New Zealand and United States). The research was based on peak-to-peak analysis of seasonally adjusted farmgate milk prices recorded from January 2001 to April 2018. The results indicate that in all regions covered by this analysis, milk cycles are uneven and irregularly interspersed. This above shows that the length of milk cycles is determined not only by the breeding cycle of cows, as it is commonly believed, but also by numerous political, institutional, economic and environmental factors. Furthermore, the magnitude of milk cycles in the regions considered generally tends to increase which suggests their growing importance in determining farmgate milk prices. Also, milk market cycles followed by major dairy exporters are strongly correlated which indicate the presence of a common global milk market cycle. Research findings show that forecasting farmgate milk prices requires considering much more factors than previously recognized. Moreover, the results of the analysis align current research efforts taken in this area which provide ambiguous conclusions.