143rd Edition of Foodcom DAIRY Newsletter
Rabobank has released its annual Global Dairy Top 20, featuring 2022 dairy sector leaders. Compared to last year’s results, five companies have fallen back, six have risen in the lead, and the rest maintained their positions. At the top of the list are Lactalis, Nestlé, Danone, Dairy Farmers of America and Yili. Danone and Dairy Farmers of America swapped places compared to the 2021 results. Companies that have slipped down in the rankings for this year include FrieslandCampina and Arla Foods. FrieslandCampina dropped from no. 7 to 8, while Arla Foods slipped from 8 to no. 9.
According to the latest data and reflections of market experts within the European Commission, milk prices in the EU are at record rates. Milk sales are seasonally strong as schools are preparing to start this week. Nevertheless, farmers’ profit margins remain tight due to higher input costs. Dry and warm conditions have affected the quality of grass and the availability of other feed components. This could result in lower than expected milk yield growth in 2022, and the availability of commodities for further processing. This is additionally to the general decrease in cattle breeding, combined with the recent reduction in dairy herd. These circumstances are leading to an expected 0.6% decline in EU milk collection in 2022. Although seasonality has been a positive indicator for business decisions for the dairy industry, experts suggest that prices are could have become the more important and a factor to take advantage of.
Continue reading to learn about this week’s market insights.
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The slight upturn in this market in particular was reflected in inquiries for Skimmed Milk Powder multiplying. This singular behavior makes it seem as if purchase representatives have returned from August breaks and are beginning to search for product to fulfill Q4 slots. On the other hand, the increase in the Western Europe was connected to raw milk indications change.
More Full Cream Milk Powder inquiries is in question, as last week’s ONIL tender for whole milk and skim milk had an impact on the significant volumes. Firm prices for as much as 60 000 tons (40 000 FCMP and 20 000 SMP product) for Q4 was contracted.
The whey products market in general is not experiencing the biggest movement, however positive feedback is reviewed for September as a month to bring back to the industry. Prices for other commodities remain stable with the exception for milk proteins being in the spotlight in the previous week.
As mentioned, milk proteins prospered throughout the week with one of the most valued commodity being Milk Protein Concentrate 85%. The quotas have surpassed rates of whey products and are less visible in the market, thus more demanded.
With the beginning of September, dairy consumption in Poland increases, mainly because of the opening of schools. Among cheeses, Emmentaler and Gouda in particular have increased. But the production of packaged cheese in Poland may be in danger, numerous dairy companies warn. This involves the cessation of production of the Azoty Group.
Noticeable stabilization in butter caused by cream increase throughout the whole continent has caused traffic regarding inquiries for September and October. Even the cheapest alternatives are in search right now, including whey butter. Additionally, we have witnessed a modest amount of Ukrainian origin butter being traded in Poland and as quantities in the region are restrained.
With the demand for butter, the cream production sector is experiencing an upward tendency, as the commodity’s stable rates do not have reasons to ease. Today’s quoted cream price is on the average at 8000 EUR/MT, but this week will show if this trend will continue in September, and indicate market factors.
Skimmed Milk Concentrate has followed the trend of liquids this week and has seen an increase in pricing, which evaluated into rates of Skimmed Milk Powder. High temperature and ongoing drought in many areas caused scarcity of the product in the market.