150th Edition of Foodcom DAIRY Newsletter
In late August 2019, our first published newsletter – “What’s Up?! on the market with Foodcom!” – arrived in your email inboxes. On this day more than three years ago, there were about twenty employees in our company, and the first edition of the newsletter reached a little over a thousand recipients.
In the last quarter of 2022, the Foodcom team consists of nearly 80 employees and continues to grow – after all, we have a constant appetite for more! Now our Dairy newsletter reaches almost 20,000 recipients. So far, because this number is also growing steadily.
It is with undisguised pleasure that we present the 150th issue of our newsletter in a refreshed layout! This is just one of many proofs that we are constantly evolving and looking for even more optimal solutions for all aspects of our business. Stay tuned for at least another 150 editions, or regret not having done so!
In this issue, as always, we have covered many topics. Read more about the situation of the individual products further down in the newsletter. Want to learn more about the Ukrainian cattle herd, cell-based milk, and possible taxes for dairy farmers? Continue reading to learn about this week’s market insights.
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While the SIAL 2022 trade show is underway in Paris, last week was not very active in the dairy sector. Many market participants focused on preparations for the event and delayed their purchases, depending on what would happen during the fair. On the other hand, the concentrate for the Skimmed Milk has decreased in price in recent weeks. However, due to the current production costs, the powder is still more expensive than the concentrate that is currently offered on the market, and manufacturers can not reduce the level offered to an absurdly low degree.
Of course, since the demand for raw milk is currently lower, the price of the product after conversion has also decreased. The powder itself does not appear to have gained momentum in the global dairy trade at recent quotations, and is not a commodity that is in demand by the Western market in terms of higher volume.
It is the most sought after product in the dairy sector right now. Buyers who are unable to replace it with a substitute with a lower protein content must accept the higher prices offered for this commodity. Availability is still extremely limited, so we see room for further price increases here.
This past week, we received more than a few calls from producers asking if we could quickly pick up a couple of trucks of cheese. It seems that producers are having trouble turning cheese into cash. At the same time, we have seen an interest in cheese for processing, grating and shredding. Manufacturers are looking for alternatives to reduce production costs.
The Cream valorization towards Butter means that the price of the product is still higher than what is currently offered on the market. Today’s price is not in line with the Cream indexes and the current supply in the market, combined with weak demand, leads to a discount on the price of the material offered. We have been witnessing only a few requests for butter at the moment. The major players are getting offers for Q4 and Q1 at 6500-6600 EUR/MT, but no large volumes have been contracted recently that need to be covered.
Cream prices fell slightly last week. There are sufficient quantities of the product available on the market to meet current demand. This trend is expected to continue in the near future. The price of the SMC has dropped over the past week. Availability remains high throughout Europe. Let’s keep in mind that the market situation for dairy products is strongly influenced by spot milk availability, which is high for the moment. The price pressure is noticeable.