FDBusiness.com

Dairy Producers Not Out Of The Woods Yet

 Breaking News
  • Carlsberg Group Upgrades Full Year Operating Profit Outlook Carlsberg Group has delivered organic operating profit growth of 17.7% for the first half of 2019 with reported growth of 18.2% to DKr 5.17 billion (€693 million). Organic net revenue growth was 4.2% and on a reported basis net revenue rose by 6.5% to DKr32.99 (€4.42 billion). Operating margin improved by 160bp to 15.7%. Reported net [...]...
  • Diageo Forms New Rum Joint Venture Diageo and Corporación Cuba Ron, a leader in the production of premium Cuban rums, have created a joint venture – Ron Santiago. The joint venture will have exclusive global distribution rights to Santiago de Cuba, a premium Cuban heritage rum brand. Globally, premium and above rum segments are growing ahead of the category overall, with premiumisation [...]...
  • Stirring Times For US Yogurt – Innovation is Vital in a Changing Consumer Environment Over half of all U.S. consumers now buy yogurt as part of their typical grocery basket, according to a new report from Innova Market Insights, but their habits appear to be evolving. Convenience themes are becoming increasingly important, for example, with 17% of consumers naming this as a significant choice factor in 2018, which is [...]...
  • FrieslandCampina Significantly Expands its VLOG Production Due to the sharp increase in demand in Germany, FrieslandCampina is increasing the number of participating dairy farms that supply VLOG milk from 400 to more than 600. All VLOG milk produced by Dutch FrieslandCampina dairy farmers is used to make cheese for the German market. VLOG (Verband Lebensmittel Ohne Gentechnik) is a German association responsible [...]...
  • English Food Manufacturers Sign Up to Made Smarter Support A number of food manufacturing firms in the North West of England have signed up to a business-led programme which aims to use digital technology to boost growth and success. By implementing advances in data analytics, Artificial Intelligence (AI), Augmented Reality (AR), Industrial Internet of Things (IIoT), 3D-printing and robotics, firms can enhance their profitability [...]...

Dairy Producers Not Out Of The Woods Yet

Dairy Producers Not Out Of The Woods Yet
March 26
09:54 2015

While the price of dairy commodities have rallied from their January lows in recent months, a report released by Rabobank highlights that this price surge is hard to justify based on current market fundamentals. Rabobank believes that suppliers are not out of the woods yet.

“We have passed through the worst for dairy market fundamentals, but things are not likely to be as tight through the middle of the year as the market is currently factoring in,” says Rabobank’s analyst Tim Hunt.

Global prices remained lifeless throughout the first half of Q1, before a surprisingly vigorous bounce starting in the middle of February. By the middle of March, whole milk powder (WMP) prices were 42% up on mid-December levels in US dollar FOB Oceania trade, with butter and skim milk powder (SMP) up 20%, while cheese remained largely unmoved.

From the supply side, New Zealand experienced a dry period in February and March, while tighter margins and penalties for exceeding quotas brought an end to a wave of milk supply growth in the European Union. In contrast to most export regions of the world, the three months through January saw continued strong growth of milk production in the US. In the meantime, China and Russia are leading the first demand driven contraction in international trade since the 2009 financial crisis.

In the nearer term, Rabobank foresees a likely loss of pricing as the market looks to deliver the signal to restrain production growth.

Tim Hunt adds: “As we progress further into 2015, supply growth will continue to slow, lower prices are expected to unlock more favourable consumption growth, and stronger buying elsewhere will help offset the weakness of China and Russia. This will gradually tighten the market and generate modest upward price pressure in 2H 2015.”

Most dairy farmers in key export regions are predicted to be back in the positive margin territory by Q4 this year.

About Author

mike

mike

Related Articles

Food & Drink Business Conference & Exhibition 2016

Upcoming Events

  • September 11, 2019Packaging Innovations & Luxury Packaging London 2019
  • October 1, 2019PPMA Total Show
  • October 17, 2019Future Food-Tech
  • November 18, 2019Plastics Caps and Closures Conference 2019
AEC v1.0.4

find food jobs

The Magazine

F&D Business Preferred Suppliers

New Subscriber

Subscribe Here



Advertisements