Hello, Partners
It’s time to plunge into dairy adventures! Our journey promises to be a mix of “Thanks for the Memories from Anuga” and the upcoming GDT, with dairy fans eagerly awaiting a taste experience that will have them chanting. Get ready to dance to the rhythm of creamy delights and experience the irresistible charm of the ever-evolving dairy market.
Hottest Products of the Week
Butter
European Butter prices are rising, fueled by robust retail demand ahead of the fall and winter vacations. However, high cream prices are dampening butter production and leading to shrinking inventories. This Ain’t a Scene, It’s a Butter Arms Race, the market witnesses a cautious dance between buyers and sellers as inventories shrink and prices rise.
Skimmed Milk Powder
SMP prices in Europe are growing up, with available stocks meeting immediate needs but steadily declining. The recent increase in demand indicates that buyers are willing to strike at current prices, reminiscent of the catchy tempo of “Dance, Dance”. Analysts suggest that deferred purchasing decisions may be contributing to the price increase, as buyers are reluctant to sign longer-term contracts. Uncertainties surrounding milk supply and demand continue to hold end-users back, making them hesitant to extend offers beyond the first quarter of 2024.
Whey Protein Concentrate
Some legends are told that WPC prices used to fall. Back to reality, European dry whey prices have risen to new heights. Sources in the industry report somewhat firmer markets and increased demand in both the feed and food sectors. Still, much like characters in a ballad, end users are showing no urgency to make longer-term commitments. The stage is set as inventories are sufficient to meet immediate needs, and the industry’s focus is on the Q4 2023 and Q1 2024 chapters.
Full Cream Milk Powder
In the pulsating rhythm of the dairy market, European Full Cream Milk Powder prices draw attention, much like the infectious energy of Uma Thurman. The choreography of the market is one of stability, reflecting Uma’s graceful demeanor. Amid quiet demand in Europe and internationally, recent price increases have led to a subtle retreat by buyers. Manufacturers, the architects of this dairy dance, continue to produce FCMP to meet their commitments while maintaining a steady to slow pace of production, attuned to the seasonal decline in milk production. The FCMP golden story unfolds like a riveting performance, blending stability, market dynamics, and the intricate dance of supply and demand.
What else?
Europe & Africa
UK
The UK dairy industry, which saw a surge in profits last year, is now grappling with a significant downturn as milk prices decline. The Milk Cost of Production report indicates that despite a 146% increase in average profits, soaring input costs and a recent drop in milk prices are set to challenge the industry. Dairy businesses are urged to swiftly adapt to manage input costs and cash flow, with forecasted profits expected to decrease to £415/cow in 2023/4.
UK
Abel & Cole has introduced a groundbreaking reusable plastic milk bottle, a first in the UK, offering an eco-friendly and cost-effective alternative to traditional packaging. The lightweight nature of these bottles, weighing only 40 grams on average compared to 200 grams for glass bottles, contributes to reduced fuel consumption during transportation. Able to withstand washing and refilling up to 16 times, the potential widespread adoption of these bottles in the dairy industry could lead to a substantial annual reduction of 300,000 tonnes of carbon emissions, showcasing Abel & Cole’s commitment to sustainability in packaging.
The Americas
USA
Dairy Management Inc (DMI) has introduced a new dairy checkoff growth program in collaboration with Domino’s and an international quick-serve restaurant pizza chain. Anticipating a substantial increase in cheese consumption, especially with an estimated 12 million pounds of cheese to be utilized, the program aims to drive pizza consumption domestically through Domino’s and internationally in regions where pizza household penetration is still developing. DMI’s collaborative efforts with various food companies, including Taco Bell and McDonald’s, leverage insights and research and development expertise to promote dairy usage, ultimately benefiting U.S. dairy producers.
USA
California Dairies, Inc. (CDI) has successfully implemented three cutting-edge decarbonization technologies in collaboration with Skyven Technologies, aimed at improving energy efficiency and reducing emissions at its two largest facilities. This includes two of the world’s largest solar thermal systems for industrial process heat, integrated with a smart steam trap solution and a boiler heat recovery system. The initiative, which saved over 3,500 metric tons of CO2 and 65,000 MMBtu of natural gas, was supported by grant funding from the California Energy Commission, utility incentives, third-party project finance, and investment from Skyven’s balance sheet. Plans for further decarbonization solutions are underway.
Asia & Oceania
Izrael
Yoel Strauss, a third-generation farmer in Israel, reflects on his family’s dairy farm legacy at Moshav Sede Ilan, initiated by his grandfather Yitzhak Strauss after surviving the Holocaust. Currently managing a herd of 200 Holstein cows, Yoel works part-time on the farm, aiming to continue the family tradition full-time. Operating within Israel’s dairy quota system, the farm produces 2.16 million liters of milk annually, with a focus on summer production to avoid winter fines. Yoel discusses breeding practices, TMR-based feeding, and the challenges faced by the dairy industry, including imports, manure handling regulations, and the potential impact of plant-based milk on traditional dairy consumption. Despite challenges, the family plans to expand the farm, hoping for a profitable future in the dairy industry.
Russia
Lyudmila Manitskaya, Chairperson of the Russian Dairy Union, has called for the establishment of a national maritime transport system in Russia to counter the ongoing decline in dairy exports. The decline is attributed to increased logistics costs due to Western sanctions, fluctuating exchange rates, and a weakened Russian ruble. In response, the Russian government plans to subsidize 100% of logistics costs for certain dairy product exports, including cheese, butter, and dry whey, starting from January 1, 2024.
