In the past week, the dairy market has experienced a kind of stabilization and calming. There was relatively little activity, due in part to the Gulfood trade show, which was held in Dubai. Most transactions were on the basis of permanent or long-term contracts.
Despite this perceived calm and slowdown, we saw price increases in virtually all dairy products. This, in turn, suggests that we have already moved away from the ‘rock bottom’ widely discussed not so long ago (that is, for a while, we all know the situation is dynamic). Hooray! (Right?)
As for predictions for the future, it is clear that upcoming Easter will be the most important factor in the near future and many products will experience a typical seasonal surge of interest. Recently, the demand for high-protein powders for sports nutrition has increased. Could it be that everyone has decided to bulk up for spring?
Skimmed Milk Powder
Current prices are accepted by buyers, but not on a spot basis. Last week, we saw that acceptance was completed at a relatively market-appropriate price of $2.77 on the GDT result. Another larger tender for Algeria was closed above the GDT price mentioned. As suppliers return from Gulfood this week, we will see if the focus is on further increasing product or easing prices to spot buyers.
Controversial situation in the current market because it is unclear where the cheapest Butter is offered and where the most expensive. There is also the question of which country forces another not to exceed a certain price level. Since Polish Butter is priced relatively close to Irish products, it doesn’t give much room for other Western countries to raise the product further. We hear that buyers accept the price starting with 5, but only for Q2+Q3. One of the aspects affecting the price of Butter is the increased demand for cubed butter throughout Europe, which has slightly increased the price.
WPC 80 Instant
With the decline of proteins in recent months, we have felt in the last week that sellers are no longer interested in giving away the products for free. Therefore, demand should pick up as the cheaper product will soon be unavailable, and the old offerings will follow as well. Compare the two products of MPC and WPC – the first does not fall as quickly as the second and remains stable.
In the last 2–3 weeks, we have noticed a lot of interest in cheese. Many producers are sold out (at least that’s what they say…). As a result, the prices of Gouda, Edam, Cagliata and Mozzarella are rising week after week. Last year the product remained at a high level, and this year we have already seen visible panic among producers when the price fell below 3 EUR/KG. Our observations indicate that a price range of 3100 EUR/MT to 3300 EUR/MT remains favorable for consumers.
The price of Cream remained stable last week, with a slight upward trend. Compared to the prices of early January, the increase is significant, but it is not yet fully visible in Butter prices.
Dairy prices in Ukraine are likely to increase in 2023 as well
One of the main reasons cited is high energy prices, large quantities of which are needed for dairy production. Some argue that cheese and butter are the most expensive in this regard, as their production is expected to consume the most energy. Wondering if the producers of milk and whey powders would agree…
Danone is one of the large companies that have announced price increases for their products in 2023
After last year’s price increases for Danone products (the largest in four decades), it looks like they will be more expensive again this year, albeit at a lower rate. In 2022, prices rose an average of 8.7% year-on-year, with most of the increases in Europe and North America occurring in the final months of the year. What will it be like this time around? Time will tell.
European dairy cooperative Arla Foods is supporting the development of the Nigerian dairy sector
A new agreement has been signed to support the development of the dairy industry in Nigeria. This will be done by promoting cooperative business structures among nomadic herders, offering training and knowledge sharing, further developing products and focusing on sustainability, and creating jobs and better living conditions for local dairy farmers.
Argentina’s milk production declined in January
However, this is nothing out of the ordinary, as every year there is a seasonal decline in production during this period. The decrease, measured by the daily average, was 7.3% compared to December. However, it is very significant that milk production increased by 3.5% compared to January 2022. What a nice decline, that is actually an increase.
U.S. files second lawsuit against Canada
The U.S. has officially filed a second lawsuit against Canada regarding dairy market access under the U.S.-Mexico-Canada Agreement (USMCA). The U.S. won the first case last January when a dispute settlement panel found that Canada was undermining the value of its dairy tariff rate quotas to U.S. farmers and exporters by limiting access to final quota volumes negotiated under the USMCA.
Uruguay’s dairy industry will record a loss of at least $100 million
This is due to losses caused by the ongoing drought. The costs incurred are primarily the result of increased supplementation costs and lower milk production. Until recently, the losses were estimated to be around $100 million, but there are many indications that they will be even higher.
Asia & Oceania
Fonterra again lowered its milk price forecast and its milk procurement forecast for the 2022/23 season
It was due to weakening demand and adverse weather conditions. The latest forecasts see farmers receiving between NZ$8.20 and NZ$8.80 per kilogram of solid milk, down from the previously forecast NZ$8.50 to NZ$9.50 per kilogram.
Bega Cheese relocates its dairy operations to New South Wales
Production at Bega Cheese’s plant in Griffith, Canberra, will cease and relocate to Penrith, New South Wales. The change will affect 19 employees, who will have a choice of severance packages or relocation. The company said the reason for this decision is the lack of dairy farms in Canberra, which causes high costs for transporting raw material to the plant. Bega argues that the relocation will not have a negative impact on product quality.
The researchers argue that Thailand needs to focus on strengthening the dairy sector
According to them, the Thai dairy sector is facing three main problems: high cost of milk production due to low quantity and poor quality of available feed, high transportation costs and deterioration of raw material quality after transportation, and a decline in dairy consumption due to the pandemic COVID -19. The remedy should be the development of milk production structures and the cultivation by farmers of crops suitable for cow consumption.