157th Edition of Foodcom DAIRY Newsletter

Author
Foodcom Experts
07.12.2022
9 min reading
157th Edition of Foodcom DAIRY Newsletter
Yesterday began the hottest event of the season – the Food Ingredients Europe trade show in Paris! We know that you have been following all the news from us closely. That means you know perfectly well that the booth you need to visit is G60 in Hall 7.1, so we do not need to remind you. See you there!

The event in Paris is, of course, not the only thing on the minds of dairy industry players at the moment. There is a lot going on in the market (although not necessarily what many would like to see…). It also looks like change will be the only constant when it comes to the market situation in the near future. Countries and companies are outdoing each other with green solutions, and the end of the year lends itself to considering forecasts for the months ahead. We write about this in more detail later in the newsletter.

Relatively high spot milk prices define the current situation on the dairy market. A similar situation is expected for the first months of next year. If you are looking for good news, at least the availability of most products on the market is quite satisfactory. Many market participants are still impatiently waiting for an increase in demand for dairy products from China, but the trend of recent weeks, or rather the lack thereof, is also in play here.

SMP


The cheapest Skimmed Milk Powder in the world today comes from European production. Due to favorable prices, exports are expected to increase in the near future. Not all major buyers are already stocked up for Q1 2023, with many waiting until the last minute for prices to fall. It should be remembered that the price of the raw material – milk – is still at a high level, and a similar trend is expected to continue in Q1 2023, which, of course, affects all dairy products offered on the market.

Butter


There is a large price differential between producers, one can even speak of a battle between the West and the East of Europe. While Butter is available in the West for about 5.70 EUR/ KG, Polish dairies still maintain a price level of about 6.20 EUR/ KG and more. Buyers are rather waiting for a downward trend and are holding back on purchases in the coming months. Will this benefit them? We will find out soon.

FCMP


Due to low profitability and numerous competing offers, especially from Australia and Oceania, European producers are withdrawing from the production of Full Cream Milk Powder. As a result, most European production is destined for the domestic market.

Gouda/Edam


The weakness of the dairy industry as a whole is now reflected in the Cheese market. The drop in dairy prices in recent weeks has put tremendous pressure on Cheeses, and sellers have been encouraged to produce them in large quantities. However, there is a shortage of buyers. There are many indications that this trend will continue in the first quarter of 2023.

Anhydrous Milk Fat


Unlike regular Butter, Anhydrous Milk Fat is not offered in such large quantities, so its price seems to be much more stable.

Cream


Last week, there was a slight correction in the price of Cream, but only in selected regions. In other regions, the price remained at the previous level due to high demand before the upcoming holidays. 

SMC


Year-on-year increases in milk collections have been recorded in Western Europe in recent months. One can even speak of a flush of milk, which is pushing down the price of liquid dairy products. This is the case, among others, for Skimmed Milk Concentrate, the prices of which are expected to bottom out around the holidays, as they do every year. Prices are expected to rebound in January.
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