It's been a tough year for global dairy markets. The pendulum that swings between supply and demand swung way too high to the supply side and now appears to be defying gravity. While we know it will swing back, its force and timing remain unclear.

According to Marc Beck, US Dairy Export Council executive vice-president: "What we have today is most likely what we will have for 2016 - a market looking for equilibrium that is sustainable for the entire supply chain. It may be 2017 before we return to a scenario where supply and demand are more closely aligned."

Over the past five years, aggregate milk production from the top 5 global dairy suppliers - the EU, New Zealand, the US, Australia and Argentina - grew nearly 2 per cent annually. That equates to an additional 5m tonnes of milk per year.

For most of that time, seemingly unrelenting demand growth, driven primarily by China, fuelled those production gains and absorbed the additional product. But in late summer of 2014, demand growth abruptly evaporated, and a boom in Chinese purchasing that began in 2013 proved to be a bubble.

From boom to bust, Chinese and Russian imports were slashed nearly in half - a drop of 8m tonnes, milk equivalent, that simply vanished from global dairy demand, representing more than 10 per cent of total world dairy trade.

And while milk production is slowing, suppliers are still pushing a quantity to match the boom import levels of 2014, import demand that isn't there anymore. In fact, the top five suppliers are still producing about half-a-million tonnes more milk today than they were back in July 2014, before the market crashed.

Market round-up

Messrs Craig Wilson Ltd sold 151 store heifers at Ayr on Thursday to a top of £1225 per head and 233.9p per kg to average £899.74 and 201.1p (+3p on the fortnight), while 137 store, beef-bred bullocks peaked at £1290 and 240.3p to level at £865.15 and 208.2p (+6.4p). Twenty-eight store, B&W bullocks sold to £810 and 167.9p to average £715.96 and 142.3p.

C&D Auction Marts Ltd had 5314 prime lambs forward at their annual Christmas show and sale in Longtown on Thursday that included 37 pens of show lambs. The sale was topped at £110 per head and 257p per kg to average 166p (+7.2p on the week).

The firm also had 4538 cast sheep forward when heavy ewes sold to £146 for Texels and averaged 371.36 (+69p), while light ewes peaked at £61 for Lleyns and levelled at £47.11 (+£6.63). Rams sold to £126 for a Texel and averaged £62.13.