Dairy Market: Swiss disaster imminent? Market Analysis from 26 April 2024
Feed costs are rising; protein concentrates stable: prices for cheese, skimmed milk powder, milk fat, and spot milk are declining.
Last week saw a decrease in milk fat and spot milk prices, and this week the remaining products followed suit. Cheese prices are seeing moderate declines of 5 to 10 cents.
The spot milk price continues to face pressure, and at €0.31, it is becoming critical for some dairies as the payout price still exceeds €0.46. Both Gouda and powdered milk are also failing to cover payout prices.
What about Switzerland?
In Switzerland, Hochdorf, the fourth-largest dairy producer, announced that no investor has been found for the entire company. The focus is now on finding investors for segments of the business, implying that the shareholders of the holding are likely to face a total loss. With Cremo, the financially troubled number 3, also struggling, milk sales are currently challenging.
This situation is exacerbated by the continued decline in sales of AOP-certified cheeses, particularly in Europe. The only glimmer of hope is the rising sales of Gruyère in the USA.
To the question: Swiss disaster imminent?
The Swiss dairy market is in a dramatic decline. An increasing number of cheeses are appearing on the market at cut-throat prices. Some established manufacturers are entering into reckless alliances with competing sales channels, further driving down the price. This desperate and counterproductive behaviour, combined with the economic problems of the third and fourth-largest players in the industry, leaves no doubt: it is red alert in the heart of the Alps.
Our forecast for Q2 and Q3:
To minimize their losses from the spring, dairies are forced to implement price increases. This will likely lead to higher prices for dairy products. Therefore, we continue to predict a price increase in the third quarter. If this does not materialize, an accelerated structural transformation in the industry is likely.
on our behalf
We are adding Emmentaler Switzerland AOP to our range. Interested in distribution of Affineur Walo Emmental? Contact us.
We will be showcasing at the following expos:
• 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
• Le Mondial du Fromage et des Produits Laitiers in Tours (France), from 14 to 16 September 2025
Best Wishes, Affineur Walo
