Will supply chain disruptions affect the price of powders? – Foodcom DAIRY Newsletter
Producers believe that supply chain disruptions in Russia and Ukraine will impact the price of powders through increased packaging, energy and utility costs throughout the production process. Meanwhile, year to date producers in western EU countries were or continue to be behind last year’s milk deliveries, with the exception of Poland.
Reduced production of SMP in 2020 and early 2021 led to an initial decline and then continued very low stocks. Demand for SMP for export remained stable despite increasing GDT performance in subsequent months. The change in the seasonality of milk production in Poland is translating into SMP availability, which is, however, still limited. The trend for SMP is towards 4EUR/kg in Q2.
For FCMP volumes have been decreasing and no direct sales are being made with products already contracted. Continued trend of FCMP being contracted only on demand where possible. German price level is stable however EU prices are varying.
For the SWP, the trend remains stable. Feed prices are getting closer and closer to food prices. Soon the prices of feed grade will equalize with food grade prices.
Strong global demand for dairy continues to push cheese prices to fresh highs. Western companies say export demand has improved, especially in Asian markets. Cheese production has held steady, but has been hampered by labor and haulier shortages. Food inflation may prove to be an “ongoing” key challenge for businesses this year.
It looks like buyers have already noticed the continuing trend of price increases and are slowly starting to show interest in buying fat for Q2. Not everyone is covered for the remainder of Q2. We anticipate that waiting to buy at the last minute will not be a good idea this year.
SMC prices have once again gone up, the current quote, is in the range of around 3350-3450 EUR/MT. Whey concentrates are maintaining similar levels as last week. Cream, like whey concentrate, can be found slightly lower or in the same ranges as before. Raw milk prices have gone up across Europe.