175th Edition of Foodcom DAIRY Newsletter

Author
Foodcom Experts
10.05.2023
5 min reading
175th Edition of Foodcom DAIRY Newsletter

Overall, the last few (dozen?) days have been pretty quiet in the dairy market. Who would have expected, given all the holidays and vacations… In any case, at the moment it is difficult to make clear predictions about the future situation on the market because every player has a different opinion about the direction in which it will develop.

Large quantities of milk are being produced in all major regions. These are larger volumes than in previous years, which is particularly evident in the EU. However, this is not a big surprise considering the current time of year (you did remember to change the calendar to May when you returned from vacation, right?). Characteristic of the current market is low demand for the coming weeks, while interest in third and fourth quarter supplies is growing. This is precisely the problem (at least for those who want to buy) because few sellers want to sign up for such a distant future.

We have been away for a while (did you miss us?), but some of the topics we discussed last time are still relevant. Another major factor in shaping the current market situation continues to be the full warehouses, but that’s not surprising since many were busy with their vacations and the goods did not have a chance to be liquidated. What else was going on in the market? Read on!

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

Butter

Despite the increase in quotations for raw material (Cream) before the May long weekend, the market was able to record a correction in which raw material was available and enjoyed high availability. As for the production of high-fat products such as clarified butter, it is cheaper compared to Butter production. On the world market, Butter has increased, which is also reflected in the quotations on the futures market, where we saw higher prices for the second half of the year. A noteworthy fact: a twofold increase on GDT.

Skimmed Milk Powder

With the recent tenders on the global platform and the second week in a row with an increase in pulse overall, we see the tendency that the product is less available at discounted prices and is offered higher, considering the external European demand. On the private market in Algeria, product traded at €2450-€2500/ MT CFR, Algiers and Onil tender ended last week at $2900 – $3000 CFR, while EEX July traded at €2580/ MT. The question remains whether this is the peak of recent growth, as the volume traded in recent weeks can certainly affect market capacity.

Gouda/Edam

As the interest in cheese, especially Dutch-type and Mozzarella, has not diminished for several weeks, producers are keeping the price high and stable, while complaining about a lack of spare capacity. Are they really unable to produce more Cheese, or is this just a game with the public to build an even higher price? Only they themselves know. Nevertheless, we still receive many requests for these products, and customers are willing to pay more than in previous weeks if delivery is made in the same week.

FCMP

The same is true for whole milk as for skim milk, which we have seen recently. The product has been traded on the world market at higher prices in auctions and tenders and is therefore in great demand on our continent. The availability of this product is limited, and we have received many inquiries about this product last week.

Cream

In recent days, the situation for Cream remained stable throughout Europe. Skimmed Milk Concentrate was also stable. In general, we observed a high availability of liquid dairy products on the market.

 

What else?

Europe

 

Difficult times for organic dairy products in Belgium

Demand for all organic dairy products is down, reflected in less interest in organic milk itself. Biomilk, a cooperative of organic dairy farmers in Flanders and Wallonia, now sells half of its milk on the conventional market and is no longer accepting new members. This is the company’s strategy to protect existing members from falling milk prices. Biomilk can nevertheless consider itself lucky because some companies can no longer sell their milk at all.

Cheese tops the list of fastest rising products in the UK

Inflation remains one of the greatest challenges for consumers and businesses. According to the latest data, cheese was among the most expensive food products in the UK in March. Swiss cheese prices rose 44% over the year, while cheddar was up 42%. Only cucumbers, which became 52% more expensive, and olive oil, which became 49% more expensive, saw even larger price increases. These are definitely not the records that cheese should reach, especially according to consumers.

Milk processors in the UK are cutting farmgate milk prices

Freshways and Arla have announced significant reductions in milk prices at the farm level. The reason given for the decision was an increase in global milk supply combined with lower domestic demand, resulting in downward pressure on prices. Recent retail price cuts initiated by retail chains also played an important role. All that remains (especially for farmers) is to keep a close eye on the changing market situation.

The Americas

 

FDA has extended the comment period for plant-based beverages

FDA recently reopened the public comment period for plant-based milk labeling at the request of several stakeholders. If the commented draft is finalized, plant-based beverages can be labeled as milk even though they are not dairy products and have different nutritional values than milk. This inspired a certain popular social media campaign…

The (next) technological revolution in dairy herd management?

Vas’s Dairy Comp recently released two new technology solutions designed to help dairy farmers manage their herds, animal health and costs. As the developers argue, the new tools replace numerous spreadsheets and allow live tracking of changes in the herd and individual cows’ bodies, allowing farmers to optimize costs, monitor animal health and even predict future health events. How did people get by in the past without all this technology?

Wood Milk – new competition for dairy products?

An ad campaign for a new brand co-founded by actress Aubrey Plaza, Wood Milk, is attracting a lot of attention on social media. The ads are, of course, a satire of plant-based dairy products and were inspired by the iconic ‘Got Milk?’ campaign. The creators argue that their goal is to draw consumers’ attention to the nutritional value of the beverages they consume, but many people were outraged by the form and message.

Asia & Oceania

 

Australian region without a drop of milk

An unusual situation is occurring in the Far North Queensland region: there is a shortage of milk and the milk shelves in the stores are empty. This is interesting and acute because the region once had hundreds of dairy farms, and as recently as 2000, the local factory was supplied by 185 producers. Now their number has dropped to 45, and the reason cited is the deregulation of the dairy industry. Much of the region’s milk needs are currently met by imports, but recently demand has outstripped supply.

Fonterra has opened a new innovation center in China

The facility, which opened in Shenzhen, southern China, will focus on the beverage category. The center was set up as part of the company’s strategy to present New Zealand milk to Chinese customers in an innovative way. Work at the application center will focus on testing and developing new products. These will be tailored to the needs and expectations of Chinese consumers.

Russian milk is a threat to producers in Kazakhstan

Recently, it has been reported that cheap Russian milk is appearing in Kazakhstan, which is clearly a threat to the interests of local producers. Experts point out that the only appropriate response is stricter border control. In their view, the uncontrollable consequences of flooding the country with cheap Russian milk are difficult to foresee, especially since the situation is likely to continue for a long time considering the weakening ruble.

Sign up for our Newsletter to learn more about our products