The situation on the dairy market is changing dynamically. But perhaps enough of the obvious. Specifically, spot prices for milk are falling, while overall production is higher than in the same period a year ago. Retail sales of dairy products are down as consumers cut back on consumption or switch to cheaper substitutes due to financial challenges and rampant inflation. The outlook for the future is not very optimistic, but this leads to one important conclusion: it is worth doing business now, when the situation is relatively stable, because no one can predict what the future will bring.
Of course, the general market situation is one thing, and what happens in individual countries is quite another. In France, milk production is declining, in Austria, electricity prices have increased tenfold, and in the United Kingdom, sheep farmers are looking for innovative solutions to survive the effects of the driest summer in 130 years. A lot is happening in other parts of the world as well, and all players in the dairy market are being forced to adapt smoothly to change.
Continue reading to learn about this week’s market insights.
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SMP
As a result of the demand for the Skimmed Milk haven’t seen an uprising trend, the slight translation of the quotations have been softly witnessed. Further declines are expected in the near future especially in the second quarter of 2023. At present consumers are trying to postpone collections of the product and review the demand necessary to keep a positive production flow in the upcoming quarter.
FCMP
The product of Whole Milk has been settled in the Western Europe with available surplus in the product and now the market is dedicated to fulfilling the active orders. Plants that focused on the production of Whole Milk Powder/Full Cream Milk Powder transitioned into Skimmed Milk production. The Skimmed Milk’s demand and sales for the European Union are more visible compared to the worrying trend of the product being pushed for export where the market is heavily saturated with cheaper alternatives for competing continents.
MPC 85%
Milk Protein Concentrate is currently the most sought-after concentrate in the dairy market. There are reports of limited availability of the raw material and an increased number of inquiries, including from outside the European Union. The inability of MPC 85% to fully meet demand is causing potential buyers to look for alternatives with lower protein content in milk concentrate.
Gouda/Edam
In general, the prices of cheese offered have corrected slightly in the last week. At this time, producers are beginning to feel less demand from retail chains, as customers are increasingly careful about what they put in their carts, often opting for cheaper substitutes. The cheese situation in the United States is dynamic. In the Northeast and West, producers have free access to milk, while in the Midwest, availability has declined, causing a temporary lull for some cheese producers.
Butter
The price range for European butter widened slightly during the week. Retail demand for butter in Europe has increased, especially in Germany ahead of the national vacation. Pre-vacation packaged butter demand is expected to remain high in the fourth quarter. Demand for bulk butter is mixed, with shoppers buying regularly but only for current and short-term needs. Butter producers in the United States have sufficient access to cream to meet their production needs. Some are even choosing to resell it to cream cheese and eggnog makers instead of storing larger quantities.
Cream
Cream was one of the products whose availability was satisfactory last week. The price of the Cream increased slightly, which, of course, affected the prices of other dairy products.
