Dairy Market: Is a Bull Market approaching? Market Analysis from 24-05-24
Spot milk price sharply rising; milk fat, skimmed milk powder on the rise, cheese and feed costs slightly increasing, protein concentrates stable.
This week has witnessed vigorous market activity, especially in the field of milk fat which continues to escalate in price. The spot milk price is approaching the payout price.
At the most recent Global Dairy Trade auction on the 22nd of May, we observed price rises, particularly with butter, while skimmed milk powder prices tended to stagnate.
Turning to Switzerland:
Following the publication of losses for 2023 by two financially troubled dairy processors, the sector has quietened down. Discussions on sustainable business concepts have temporarily receded to the background.
A notable article in "Food aktuell" magazine hit the nail on the head with the headline: "The Skimmed Milk Powder Must Go!" An excess of milk in spring has led to rising stock levels of skimmed milk powder. The disposal of these surpluses is now being financed by a deduction from farmers' paychecks.
In theory, these funds could be used to stimulate cheese sales, providing a long-term sustainable solution for the dairy industry, yet such strategies seem to continue to be thwarted by systemic issues.
Regarding the question "Is a Bull Market approaching?"
Climate change is increasingly impacting the dairy market. The mild winter led to an early milk peak, followed by cold and wet weather that particularly dampened production in countries with grass-based feed systems like Ireland. Currently, there is almost a sense of panic as many stakeholders rush to make purchases. This situation is expected to calm, but the lowest prices of Q2 and Q3 appear to be a thing of the past, suggesting a stable bull market is on the rise.
Our forecast for Q2 and Q3:
Demand for Cagliata in the south remains subdued, yet due to the scarcity of milk, prices are rising. We anticipate higher prices in the third quarter.
We will be present at the following trade fairs:
• Cibus Parma, from 7 to 10 May 2024
• PLMA Amsterdam, on 28 and 29 May 2024
• Summer Fancy Food New York, from 23 to 24 June 2024, in partnership with World's Best Cheese
• International Cheese Award, on 27 June 2024
• Sial Paris, from 19 to 23 October 2024, where we'll have our own booth
• Marca Bologna, from 15 to 16 January 2025
• Winter Fancy Food Show Las Vegas, from 19 to 21 January 2025, along with World's Best Cheese
• Sirha Lyon, from 23 to 27 January 2025
• Tutto Food, Milano, 5 – 8 Mai 2025
• Le Mondial du Fromage et des Produits Laitiers in Tours (France), from 14 to 16 September 2025
Best Wishes, Affineur Walo
