By all accounts, the sentiment among dairy people at Anuga, the world’s largest food and drink exhibition, held in Cologne last week, was negative. With the US continuing to pump milk supply at clockwork-like growth of 2% every month, coupled with a significant recovery in milk production in major countries like Germany, France and the UK, many dairy traders and buyers took a dim view of where the market is headed in 2018.
By all accounts, the sentiment among dairy people at Anuga, the world’s largest food and drink exhibition, held in Cologne last week, was negative. With the US continuing to pump milk supply at clockwork-like growth of 2% every month, coupled with a significant recovery in milk production in major countries like Germany, France and the UK, many dairy traders and buyers took a dim view of where the market is headed in 2018.
The one outlier for supply remains New Zealand, where the spring weather has been extremely wet. Farmers in the North Island reported rainfall as high as 53mm in a single day last week, which will undoubtedly hit production.
Figures from New Zealand for September milk production will be released later this week and this should tell a lot. Fonterra has already downgraded its forecast for milk collection this season by 2% due to the bad start to the year.
Despite this revised forecast for supply, this week’s GDT auction in New Zealand returned a negative performance with average prices falling 1%. While whole milk powder (WMP) prices dropped 0.5% close to $3,000/t (€2,560/t), the biggest decline was posted by skimmed milk powder as prices plunged 6% to less than $1,800/t (€1,530/t).
The big fall in SMP prices is a negative reaction by dairy markets to EU Commissioner Phil Hogan’s remarks this week that the EU must sell its 380,000t of SMP stocks currently sitting in intervention.
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