Analysis dairy business
GDT does not give milk powder price a new impulse
After a prolonged period of price falls, the milk powder market has recently been given more air. Still, there seems to be limited room for price increases given the recent movements on the Global Dairy Trade earlier this week.
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Although the distance to intervention levels was still a few hundred euros per tonne, this support measure has recently been considered again in the market. The milk powder market was in a downward spiral for almost a year, with prices just shy of halving. The DCA quotation for skimmed milk powder fell from more than €4.000 per tonne to almost €2.000 per tonne. Whole milk powder and whey powder also fell sharply. The upward trend has resumed since mid-April, partly thanks to the efforts of traders trying to boost the market.
However, it is unlikely that the milk powder market will pick up sharply. Inventories are large and sales on the world market are described as weak, mainly because China imports little. The export figures for skimmed milk powder in January and February are considerably ahead of last year, but the comparison is cloudy. Due to the extreme shortage at the time, export figures dropped significantly in 2022. In February, member states jointly exported 66.275 tons. This is 40% more than in the same month last year, but lower than in the three years before.
Global Dairy Trade
Expressed in dollars, European products are reasonably competitive on the world market. The differences with product from the United States are limited. Prices on the Global Dairy Trade are more than $150 per ton higher, but the recovery there did not continue during the safe that took place yesterday (May 16). Skimmed milk powder fell back slightly, while whole milk powder took a step back. Butter did gain some ground, but cheddar actually fell back in price. On balance, the average price fell by 0,9% to $3.488 per tonne.