DENVER — A new quarterly report from CoBank’s Knowledge Exchange projects that it’s unlikely global supply chains and world markets will unwind, amid concerns about the ramifications of the war between Russia and Ukraine.
Per the CoBank report, the war won’t diminish the need for global trade, which reached $28.5 trillion in 2021, setting a new record.
While grain and energy markets have been upended by the conflict, the effects also have been felt within the realm of US dairy. CoBank noted that milk supplies tightened last quarter as rising production costs proved to burden dairy producers.
Meanwhile, the report highlighted that strong international demand for dairy products combined with a global supply that’s falling is bolstering US exports, and the situation signals strong support for dairy product prices in the months ahead.
The CoBank report forecasted that demand for dairy in China will be a focus in the second quarter of 2022, and stated efforts to stockpile commodities could potentially lead to new demand for US dairy products.
Additionally, CoBank projects that inflation rates should begin to decline by this summer, as commodity prices impacted by the war in Ukraine moderate, and trucking rates and bottlenecks ease.
CoBank is a $170 billion cooperative bank that serves industries across the rural US, with loans, leases, export financing and other financial services.