Dairy markets will continue to enjoy growth around the world despite the very significant short term challenges facing the industry.
Speaking at the Economics Seminar at the European Dairy Association (EDA) Annual Congress in Edinburgh, Kevin Bellamy, Senior Analyst at Rabobank, said: "Global growth should continue at 2% or more.
"There is clearly too much milk on the world market and leading dairy countries, such as New Zealand, have been facing extremely challenging conditions. Emerging markets should provide the opportunity for more balanced growth on the international market."
He cited the changing market conditions in the US to be significant for the future of the dairy industry. "There are rising stocks in the US which is likely to reach a tipping point, resulting in milk prices falling by the end of 2015. The strength of the dollar will also hamper export efforts", he said.
Mr Bellamy also said that changing conditions in New Zealand and the US could lead to 1bn litres of less surplus on the world market.
Other factors having a major influence on the world market are the continued Russian ban on imports and the reduction in China's demand for imports, in addition to continuing high levels of production in Europe.
The Congress was told that the drop in oil prices and exchange rates were also material factors, particularly for emerging markets.
"Demand for dairy will expand, particularly driven by emerging markets, and this will result in more target destinations for companies. There will be plenty of opportunities for dairy built primarily on population growth and per capita consumption."
Dr Judith Bryans, Chief Executive of Dairy UK, said: "The UK and European markets are affected by global factors and we in the UK industry must continue to make every effort to be internationally competitive and add value to dairy."