Hello Partners!
It certainly feels like summer, but the work is in full swing! New website, new offices, new products and lot’s of business development. That’s about us. Want to know the latest news about the dairy industry? Keep on reading!
Continue reading to learn about this week’s market insights.
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Butter
As predicted, due to the fact that there is plenty of butter on the market and in the warehouses, customers (if you can find one) are pushing the price even further, and they are waiting for a price that will start with 3 at the beginning.
On the flip side, Southern Europe is under a huge heatwave, which will surely affect their milk collection. This can balance market demand and eventually lead to price stabilization.
Skimmed Milk Powder
Another week, another weakening on the prices, but not as hard as we witnessed in the past. The rumors about the ONIL-Algieria tender are keeping alive the manufacturers and parties involved in supplying this region. At the same time, we heard that a few drying towers are being shut down – but we don’t know if it is a maintenance break or if they’re finding better ways to cash liquid milk into other products.
Gouda/Edam
We can see that this week’s prices are slightly lower, as we are in the middle of the summer gap. Nevertheless, not every cheese producer is willing to lower the price. Due to high temperatures, the milk has less fat and protein. The biggest interest is still in Cagliata thanks to Mediterranean buyers. Prices for Q3 remain more or less the same as for now.
Whey Protein Concentrate
The market is experiencing a huge disproportion in the prices offered by German and Polish manufacturers compared to the rest of Europe. Germany and Poland are leading a trend that increases prices every week and says they are mostly sold out for the coming months. On the contrary, we are still receiving offers with decent prices and volumes from the other ones.
Cream
At the beginning of the week, the prices were lower, but as market players turned to the market to do some shopping, the prices went up. Spot milk prices declined a bit, so did the milk collection during this part of the year. SMC is stable, but we hear, here and there, that SMC will drop.
What else?
Europe
Scotland – Significant boost in margin over purchased feed
Scotland – The dairy industry has witnessed a significant boost as the margin over purchased feed has surged by a remarkable 86% per cow. This encouraging development comes as a boon to dairy farmers and stakeholders alike.The increase in dairy margin over purchased feed signifies improved efficiency in feed utilization and herd management, leading to higher milk production per cow. As the sector continues to grow, it is anticipated that the increased profitability will encourage further investments, modernization, and technological advancements in the dairy value chain.
UK – British retail sales in June outperformed expectations
UK – British retail sales in June outperformed expectations, registering a 0.7% increase compared to May. This growth was attributed to the exceptionally hot weather and a recovery in food sales following disruptions caused by King Charles’ coronation in May. Despite the UK’s high inflation rate of nearly 8%, the upcoming fall in energy prices from July 1 is expected to provide consumers with more disposable income. On a year-on-year basis, sales were 1.0% lower, which was better than the anticipated 1.5% decline.
Ukraine – Ukraine ban may result in losses of up to 500,000 few-day-old chicks
Ukraine – Ukraine has introduced a ban on the import of hatching eggs, live poultry and poultry products from the entire territory of Poland due to the occurrence of Newcastle disease in the Podlaskie Voivodeship. The decision was made on July 13, 2023. The National Chamber of Poultry and Feed Producers explains that the embargo may result in the loss of life of up to 500,000 few-day-old chicks that were supposed to be exported to Ukraine. Ukraine is the largest importer of day-old chicks from Poland, reaching up to tens of millions a year. Imports have been banned from the whole country, although according to agreed procedures, they should be limited to only one poviat.
The Americas
USA – El Niño might bring significant consequences
USA – Despite efforts to boost sales, exports have declined, causing concern for the industry. The decline is attributed to various factors, including a drop in sales to key markets like China, Southeast Asia, and Mexico. Additionally, global dairy product prices have been competitive, impacting export competitiveness. These struggles have raised questions about the future of U.S. dairy exports and the need for innovative strategies to overcome the obstacles and regain momentum in international markets.
USA – The future of the dairy market is raising questions
USA – Despite efforts to boost sales, exports have declined, causing concern for the industry. The decline is attributed to various factors, including a drop in sales to key markets like China, Southeast Asia, and Mexico. Additionally, global dairy product prices have been competitive, impacting export competitiveness. These struggles have raised questions about the future of U.S. dairy exports and the need for innovative strategies to overcome the obstacles and regain momentum in international markets.
Uruguay – Big changes in export numbers
Uruguay – Exports of WMP from Uruguay equalled US$ 294.2 million in the H1 of 2023. That was a growth of 25% in current dollars compared to the same period last year. During the first half of the year, the Uruguayan dairy industry’s primary export product constituted approximately two-thirds (66%) of the total exports, amounting to US$445 million, showing a notable growth of 7%. In contrast, the exports of skimmed milk powder saw a considerable decline of 57%, amounting to US$22.1 million, while butter exports also decreased by 41% to US$27 million.
Asia & Oceania
New Zealand – The future of export in light of Chinese demand
In New Zealand, dairy farmers are facing challenges in achieving profitability due to lower-than-expected milk payouts. Several co-ops have revised their projected milk payout prices for the upcoming season due to reduced demand from China and declines in dairy commodity auction prices. The market conditions are volatile, and New Zealand is closely monitoring China, as some stakeholders anticipate that Whole Milk Powder (WMP) exports from New Zealand to China will continue to lag behind the previous year until the beginning of next year.
New Zealand – GDT results influence the butter market
After the latest GDT 336 auction results, butter prices in Oceania experienced a decline at both ends of the price range. The market witnessed a 2.7 percent decrease across all contracts. The majority of purchases came from buyers in Southeast Asia, while overall demand has weakened.
Australia – The problem with milk flow
In Australia, the recently established Australia-United Kingdom free trade agreement, effective from May 31, is expected to grant Australian exporters access to dairy free quotas. As the new milk season begins in July, some farmers are benefiting from higher farmgate milk prices, with major processors offering pay prices similar to last year’s record prices. However, the milk supply is not sufficient to meet local demand, and market sources reveal that the national milk pool declined by 5.3 percent at the end of May 2023.
