Summary of the week 33

Author Aleksandra Konarska
Reading time 9 minut
Publication date 01 September 2020
This is our summary of the week 33 on the European dairy market divided into 4 main categories.

 

Powders

Lactose is quite stable with a slight increase in the top of the price range. Buyers prefer to await for concluding Q4 contacts as they hope that the price will drop. It slows down the demand, but the production is steady.

SMP prices firmed up. It can be mainly attributed to the reduced amount of raw material. As the situation won’t change anytime soon, the prices will most likely climb further up. The Algerian tender is said to be closed at 2.25 EUR/kg which may drive the prices up. The production was higher for the first half of 2020 by 0.9% than the year before.

The demand for FCMP is reduced and some producers decided to focus on other products. Not much commotion is forecasted in upcoming weeks.
Whey is rather steady with a faint decrease at the higher end of price range. However, the news of turning up ASF in Poland might stir the situation.

Cheese

There is a steady demand for semi-hard types of cheese. Both for the domestic and export destinations. Although the demand and supply are more or less at the same level, there is still no equilibrium. Export and declining numbers of raw material are attributed to the low stocks.

On the other hand, the dom estic demand is likely to go up, as fall season favours consumption. This might push up prices. EU cheese production for January-June was 2% higher in 2020 than in 2019.

Butter

The butter price went up, as one of the main German retailers closed its deal at about 3.64 EUR/kg. The rest of Europe followed. Butter cubes demand is described as normal for this time of the year.

Nevertheless, the demand will probably go up as everyone will be back home after holidays. This will be also reinforced by rising cream prices. It is almost sure that the trend will not swing around any time soon.

Oceania’s butter prices are complex as the majority of sales would have kept prices lower, however, there was stability for the upper range prices although they reflect the limited volume, and as analysts believe, the price will not remain high for a long time. According to Dairy Australia on a YOY basis, the export of butter dropped 38,9 percent.

Oceania’s cheddar pricing remains steady and manufacturers are not experiencing any impediments this time of the year. Yet, the export of Australian cheddar significantly decreased, as data shows, in comparison of July 2019 – June 2020 with July 2018 – In June 2019, it is 24.5 percent lower.

Liquids

The heatwave that sizzled Europe in August resulted in lower milk production for that month. SMC was still high, above 2000 EUR/MT, so there was no use in drying. Full milk peaked up last week. Prices will hold on to those levels in Central Europe, as there is less material. In general, liquids are on a rise.

Despite the heat waves that Mexico experienced, this year’s output is higher in comparison to 2019.

South America is experiencing beneficial weather conditions, and milk manufacturing sees a significant increase, and as observers predict, it will sustain on a rising level. South American dairy industry is getting used to constraints related to COVID-19 as they became the new norm for many manufacturers. Changes related to disease affected also consumer consumption patterns, and as an answer to new demands, producers invest more in fluid milk, particularly in UHT.

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