173rd Edition of Foodcom DAIRY Newsletter

Author
Foodcom Experts
19.04.2023
7 min reading
173rd Edition of Foodcom DAIRY Newsletter

The period around the holidays of various religions and cultures provides a certain calm and slowdown in the dairy market. Also of great importance is the relatively cold weather, which delays the peak of milk production. This is particularly noticeable in Europe. Further development will largely depend on how the weather changes: A possible rise in temperature will undoubtedly impact both the supply of milk and seasonal consumption of ice cream and other similar products.

Cheese and fats have been in high demand recently. Protein-rich powders are also in demand. While the situation for many dairy products remains stable, prices for butter and liquid products are rising. We write about the details about particular products below.

In addition, this issue of the newsletter covers the following topics: a major supermarket chain is lowering milk prices, artificial intelligence is working on excellent (which, we guess, we’ll have to find out) alternatives to cheese, a tragic accident intensifies the discussion about safety, a certain dairy scandal leads to the arrest of six people, and much more.

Continue reading to learn about this week’s market insights.
With us, you’ll never miss a thing!

Skimmed Milk Powder

The current market spot offers are still of a fulfillment towards the safe players. As for the interest, it is mainly due to the demand from traders who want to meet the needs of their customers for H2 orders. Suppliers have been asked to provide a price for the Q3/Q4 period, but all have declined, as the market is still uncertain what will happen. However, we continue to see strong futures support. Q4 SMP futures are still trading around €2700. These prices should keep the Q2 market from going much lower than we are today.

Butter

The sector of fats offers volatility in the current market, but not one we would expect. The changes of 100 EUR/MT for the product were observed last week, and we hope for a further increase. After the Easter holidays, with orders already covered and consumption booked, it could also go down again.

Lactose

Following Sunday’s announcement regarding the temporary banning or closing imports of Ukrainian products, including sugar, we believe substitutes in the form of Lactose and other derivatives may be worth a look. In the short term, Lactose prices could rise due to lower sugar volumes on the market. Our buyers are also showing interest in the product.

Gouda/Edam

The cheese market has been quite stable lately. The number of those willing to buy far exceeds the number willing to sell. This is especially evident in the case of Gouda. The current situation is very different from last year. Most transactions are made for products that are still available in the same month. Spot demand in selected European countries is increasing, which affects the amount of unsold product on the market.

 

What else?

Europe

Tesco, the British supermarket chain, is cutting milk prices

It is the first time this has happened since May 2020. Some firmly believe that this heralds a calming of rising food prices in Great Britain. Whether their enthusiasm is premature remains to be seen, of course. In March, food inflation rose to a record high of 17.5%, with prices for products such as milk, cheese and eggs rising the most. Not surprisingly, any sign of a turnaround in the situation is greeted with great enthusiasm and taken seriously…

Russia’s dairy industry is struggling with fraud

The latest data show that almost 15% of dairy products sold in Russia in 2022 were adulterated. While this is a high and alarming figure, the situation has improved in recent years. In 2018, the figure was as high as 20%. In most of the frauds, milk fat is substituted for vegetable or animal fat of a different type, which allows the sleazy manufacturers to save money while negatively affecting the final product.

Bel Group will create new alternatives to cheese

Artificial intelligence will invent them. The new products will be very similar to cheese and indistinguishable from the original. To develop them, the company has partnered with biotech startup Climax Foods Inc. which will provide the technological solutions needed to achieve its goals. The greatest challenge is to combine the right taste, nutritional value and carbon footprint reduction. The real question is: Is there anything that artificial intelligence cannot take over?

The Americas

More than 18,000 cows died in a fire at a dairy farm in Texas

The cause of the fire is currently unknown. It was the most tragic loss of animals in a farm fire since statistics have been kept on the issue in 2013. Over the past decade, approximately 6.5 million animals, primarily poultry, have died in such fires. The latest tragic incident has stimulated the debate over the introduction of federal regulations to prevent barn fires.

The Miami milk scandal leads to the arrest of six

Employees of milk distributor Island Dairy (which partners with McArthur Dairy) were arrested on suspicion of stealing more than $1 million worth of dairy products. According to a police report, the suspects stole more than $925,000 worth of milk and $350,000 worth of milk packaging from McArthur Dairy since 2021. The suspects are currently in custody. As you can see, the case is serious. So serious, in fact, that the police action is being referred to as ‘Operation Got Milk’…

Sucesores de Alfredo Williner was acquired by the French company Savencia Fromage & Dairy

The acquired company is one of the largest players in the dairy products sector in Argentina. It has 5 production plants in the province of Santa Fe. It has been in operation since 1928 and processes 470 million liters of milk per year. The merger of the companies must still be approved by the competition authorities in accordance with local laws.

Asia & Oceania

Indian dairy farmers get support from U.S. scientists

Scientists from Cornell University will support Indian farmers with their expertise. The goal of the project is to reduce methane production by cows (a controversial issue in many circles…) and increase milk yields. As the world’s largest milk producer, India plays a key role in methane production by livestock. That, of course, is the bad news. The good news is that they can play an equally important role in reducing methane production. It has to work, after all, there’s a reason why American scientists are considered the best in the world, right? Right?

Significant price increases for dairy products in Kazakhstan

The latest information shows that prices for dairy products have increased by almost 30% during the year. The increase of 29.1% is an average for the whole country. In some regions, prices have increased by up to 42% year-on-year. At the same time, the production of dairy products in Kazakhstan has increased slightly, by only 1.2%.

Mother Dairy plans to expand its offerings significantly

The company has announced plans to add up to 100 new products to its portfolio over the next three years. The first 15 of these are scheduled to appear as early as the upcoming summer season. 10 of these will be new ice cream variants. The company is confident that the strategy it has developed for the coming years will help establish and strengthen its position as a major player in the dairy market.

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