Analysis dairy business
Weak Global Dairy Trade with lowest sales in years
The Global Dairy Trade does not give an upward impetus to the dairy trade. Almost all manufacturers are in the red and the milk powder market stands out in the negative sense of the word. But the low traded volume is perhaps even more striking.
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With a decline of 4,8%, skimmed milk powder drops to just over $2.500 per tonne. With the second sharp decline in a row, the price drops to the lowest level since September last year. It is striking that prices for the supply contract in May are at a lower level than in April, which indicates that there is little confidence in market recovery in the short term.
Whole milk powder shows a slightly less significant, but nevertheless strong decline of 4,2%, falling to $3.143 per tonne. Bad news for Fonterra's milk price, which relies heavily on the valorization of this product. In any case, this Global Dairy Trade is hardly encouraging news for dairy farmers and dairy producers.
Buyers, on the other hand, are confirmed in their thoughts that the dairy market is weak in the run-up to the seasonal peak milk in Northwestern Europe and the United States. In addition to milk powder, cheddar, mozzarella and butter are also moving downwards.
Lowest volume since 2020
On balance, the average price drops by 2,8% to $3.497 per tonne. The traded volume of 19.665 tons is the lowest since May 2020. It must be taken into account that it is March, because in other years the least volume was traded in the months of May or June. This is because Fonterra is the largest supplier on the trading platform and at that time milk production in New Zealand is in the seasonal trough.