It seems that some sectors of the dairy market have entered the vacation season a little deeper than before, i.e., the period of supply for a long absence has ended, and the vacations have begun. This is indicated, for example, by the situation in the powder market, where it was difficult to speak of an intense movement last week. Well, except, perhaps, Whey Protein Concentrate, which was one of the powders that enjoyed greater interest than in previous weeks.
Of course, that does not mean it was generally quiet. After all, the dairy market is not just a powder market (although opinions on the subject can be controversial). For cheeses, the situation is similar to the previous week, with an increase in demand for Cagliata. How has the situation of each product changed in the past week? All the important details can be found further down in this article.
Also in this issue of the newsletter: the situation of organic milk producers in Ireland, artificial intelligence and artificial intestines, litigation, frozen yogurts, disputes between countries and much more! Read now or regret later.
Continue reading to learn about this week’s market insights.
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We have seen some easing in Butter prices. However, this time it is not related to Cream prices, but to the general demand that has been met by buyers in recent weeks. The volatility of Raw Milk and Cream prices has shown that they have the potential to continue to rise (which we suspected last week at the lower limit and proved to be wrong).
Skimmed Milk Powder
Manufacturers are in a comfortable position. With the good wave of sales in recent weeks, continuity on all auction platforms, higher demand on the continent as well as the export side, the pressure on today’s sales became less. Therefore, the worrying tendency of producers to sell on a spot basis below the valorization of farmers’ payouts has eased. Certainly, the product is available, but the market is still oriented to the demand of customers, which is too low to cover the total European production available.
Buying interest has calmed somewhat, especially the largest market, the retail sector, has finalized its purchases for the coming month. At the same time, summer vacation countries such as Spain, Italy and Greece are looking for the product, as it seems that this will be a good vacation season for these countries. Many of the producers have felt the blood in pricing and put their sales at the level of the Alps and not the Mediterranean Sea.
Full Cream Milk Powder
As in every year, the sentiment in the Mediterranean countries regarding the consumption and production of Full Cream Milk Powder is again very good. We could observe that the first week of significantly greater demand for FCMP came earlier than we expected. We think that the reason for this is that the vacation season started earlier and many people went on vacation in June, as evidenced by the autoresponders and business postcards sent to us.
Cream prices remained fairly stable last week. High temperatures in parts of Europe caused an increase in demand. Skimmed Milk Concentrate was slightly higher than last week. Spot milk was similar to before.
It is hard to be an organic milk producer in Ireland
Many in the Irish organic dairy sector have recently expressed concern about the lack of profitability. In their view, the only reasonable way out of the difficult situation is to increase the price of milk procurement. Although consumer interest in organic farming is growing, the cost of production for organic milk is even higher than that of the standard variety, making profitability in this type of business even more difficult to achieve.
Danone relies on Artificial Intelligence
At Danone’s new factory near Paris, scientists are working on a new, groundbreaking generation of yogurts. They are relying on Artificial Intelligence and on… artificial intestines. Once the bacteria inside have proven they can survive digestive juices, Artificial Intelligence will be used to test their potential health benefits. The company believes that ongoing research will provide a clear answer as to which bacteria are most beneficial to health, allowing it to optimize the composition of the yogurts it offers. Is there already an application for this use of artificial intestines, or do we still have to wait for development?
Swiss loses cheese case in EU court
In 2017, Emmentaler Switzerland applied to the European Union Intellectual Property Office (EUIPO) for protection of the Emmentaler/Emmentaler trademark. The application was rejected. The company also recently suffered a defeat at the European Court of Justice in Luxembourg. The ruling pleased, among others, the Association of Austrian Milk Processors (VÖM), which also produces Emmentaler cheese and takes the view that Emmentaler cheese is a collective trademark and therefore cannot be protected under trademark law.
Argentina’s dairy sector in trouble
Dairy exports are falling and there are many indications that this trend will continue for a long time. In the first quarter, dairy exports totaled 93 400 tons, a 10% compared to the same period in 2022. The outlook for Argentina’s dairy sector is not good. In addition to local problems, Argentine farmers and processors are facing all the aggravations that come with the global economic situation.
The Canadian market open to Ukrainian dairy products
Despite the extremely difficult situation, Ukraine has managed to increase the number of exported goods and bring them to more foreign markets. The opening of the Canadian market will clearly help to increase the profits of Ukrainian producers and thus strengthen the country’s economy. In 2023 Ukraine exported 55% more dairy products than in the same period of the previous year, and the opening of more markets gives hope that the upward trend will continue.
Yasso’s frozen yogurts are moving into the hands of a global giant
Unilever recently announced that it will soon acquire the Yasso Holdings frozen yogurt brand in North America. The company said the Yasso acquisition is part of its strategy to grow its ice cream division and meet the growing demand for healthier snacks. The transaction is expected to close in the third quarter of 2023. Does frozen yogurt fall into the ice cream category? It’s a question that has puzzled philosophers for millennia. And it’s probably pretty insulting to ask it…
Asia & Oceania
Australia’s milk production is declining
Many households around the world, including those in Australia, are feeling the financial pressure. This situation is affecting the decline in global sales of dairy products and, as a result, the volume of dairy production. Australian milk production, for example, has declined by almost 6% in the last 12 months. Export volumes, on the other hand, fell by a full 14% between July 2022 and April 2023.
New Zealand and Canada cannot get along
There has long been a dispute over the implementation of the Trans-Pacific Partnership trade agreement. New Zealand claims that Canada’s current dairy import regime prevents access to New Zealand milk, cheese, yogurt, and ice cream. According to New Zealand dairy sector officials, Canada met only 8% of its import quota last year, causing New Zealand to lose $55 million in market access over the past two years. At the same time, Canada says the restrictions are necessary for the system to function efficiently. Lifting the restrictions would lead to ‘absurd results.’ Who’s right?
The Australian dairy industry is in for a favorable year (despite the production decline)
According to the latest forecasts, Australian producers can expect stable milk prices in the new season. The 2023-2024 season is expected to be favorable for Australian dairy producers, with the sector turning a profit for the fourth consecutive year. Although next season’s milk price is likely to be lower than the high prices currently offered in some parts of the southern export region, Australian milk prices are expected to be stable in the new season.