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Dairy’s Q1 2024 price projections are shrouded in a fog of uncertainty as producers delay releasing their offers until November. While buyers eagerly await the start of the new year, sellers have been cautious due to uncertainty about milk supply and price trends. Some have resorted to “alibi offers” that are just for show, with no intention of actually committing. In addition to this economic conundrum, the troubling specter of the Israeli-Palestinian conflict potentially spilling over into neighboring regions casts a dark shadow over the industry, causing concern on both the political and business fronts. Stay tuned for more as Dairy unravels the mystery of Q1 2024.
Hottest Products of the Week
WPC 80
WPC 80 and WPI 90 continue to be highly sought-after products in the market, with a sustained upward trend in demand. Their popularity and desirability show no signs of abating, reflecting a robust and growing market for these high-quality milk protein products.
SMP
In Europe, milk production is declining, with some sources suggesting that volumes will be comparable to or even lower than those in 2022. The decreasing availability of milk combined with high input costs is having a negative impact on cheese production. Meanwhile, milk powder products like Skimmed Milk Powder continue their upward trend.
Butter
Butter prices have skyrocketed, while cream availability varies by region. In the West, cream remains in short supply, while availability has improved in some areas. Conditions are more favorable for buttering in the Central region, while cream volumes have increased in the East and Central regions. In the West, butter production is inconsistent as current prices limit local cream purchases.
Cream
Cream prices have been rising, with significant month-to-month increases, particularly in the Midwest. While consumers are benefiting from this upward trend, fluid milk processors have yet to see any significant change in prices.
What else?
Europe & Africa
Belarus
The Ministry of Agriculture and Food of Belarus has once again adjusted the minimum prices for butter sold under foreign trade agreements. According to the new decree, butter with a milk fat content of 80% or higher will not be sold to Russia for less than 490 Russian rubles per kilogram, up from the previous price of 480 Russian rubles. Additionally, butter with a milk fat content of more than 72% but less than 80% will see its minimum price increase from 430 to 440 Russian rubles per kilogram.
EU
MSD Animal Health, a division of Merck & Co., Inc., has received a positive opinion from the European Medicines Agency’s Committee for Veterinary Medicinal Products for its vaccine, BOVILIS CRYPTIUM®, designed to protect cattle against Cryptosporidium parvum (C. parvum) infection. This vaccine, the first of its kind, targets pregnant cows to raise antibodies in colostrum against C. parvum and aims to combat a highly infectious and zoonotic parasite causing gastrointestinal diseases in cattle. Vaccination during pregnancy can help protect calves at birth and reduce the impact of C. parvum on calf health and production efficiency.
The Americas
USA
U.S. milk production has decreased for the third consecutive month, with the dairy herd now at its smallest size since January 2022. In September 2023, U.S. milk production was 0.2% lower than the previous year, with 9.37 million dairy cows, down 36,000 from the previous year. The average milk output per cow saw a minimal increase, and variations in production were influenced by regional weather conditions, high feed costs, and tight profit margins.
USA
In the fourth week of October 2023, the U.S. dairy industry saw a significant slowdown in dairy cull cow marketing, reaching a 15-month low in September. While fluid milk sales for August 2023 decreased overall, there were positive trends in whole milk and flavored whole milk sales, with some notable increases.
Asia & Oceania
Russia
The Russian dairy industry is contending with decreased purchasing power among the Russian population, leading to heightened competition for consumers’ food spending. Private labels now constitute a significant portion of the market, causing some dairy companies to decide whether to produce for private labels or develop their own brands, even though competing with private labels can be financially demanding. The rise of hard discounters in the retail sector is reshaping the market, with traditional supermarkets experiencing sales decreases while discounters and online sales are on the rise.
Israel
In a tragic and unexpected attack, Hamas soldiers breached the Israel-Gaza border on October 7, 2023, targeting dairy farms located in kibbutz communities near the border. This assault resulted in the loss of numerous lives, including both Israeli dairy farmers and foreign workers, some of whom were kidnapped or killed. The affected farms, responsible for a significant portion of Israel’s milk production, have been abandoned, leading to dire conditions for the cows left without proper care and milking.
