Dairy commodity prices are heading for record prices and expectations are they will increase further. As the representative party for the Irish dairy industry
attend Gulfood this week, they will be doing business with these high prices ringing in their ears.
Dairy commodity prices are heading for record prices and expectations are they will increase further.
As the representative party for the Irish dairy industry attend Gulfood this week, they will be doing business with these high prices ringing in their ears.
European cheddar is nearing €5,000/t, while Mozzeralla cheese is at €4,250. Butter is almost at €6,000 - ok, it's not the heady heights of before just yet, but it's getting there.
It’s a long way from the industry leaders who stood up at conferences not that long ago and told us they didn’t want ‘fat’ as a rule. They’ll take it all day long now.
The skim and butter combination is further strengthened with skim milk powder at €3,650. All commodities have increased nicely in the last four weeks alone.
Infant formula
The other chat at Gulfood will be about who is going to buy two of the big infant formula brands that are for sale.
Dutch co-op Freisland Campina is selling its Friso brand, while Reckitt-Benckiser's infant nutrition business is also supposedly up for sale.
Both will be hoping someone from Asia will be eyeing up these businesses at Gulfood. Reckitt-Benckiser's financial results are due 17 February, so it will be interesting to see what happens.
Given the dropping margins in this category, both companies will know that it should not be assumed sale value will yield high.
Some analysts studying the possible sale of Reckitt-Benckiser's infant nutrition business speak of a potentially tricky sale.
Maybe the Irish companies can strike a deal and do some sort of a contra with Friesland for Friso in return for some Kerrygold butter and cheese, instead of taking on each other in the global market.
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