These are unprecedented times. Europe’s €600bn foodservice market, which comprises all the food sold in restaurants, cafés, fast food outlets, bars and hotels, has been completely shut down over the course of a few days in a bid to halt the spread of coronavirus.

While this is undoubtedly the right move to protect lives, it is still a hammer blow to food producers and farmers all across the continent. For Ireland, the impact of shutting down the entire foodservice market is particularly acute. Our meat and dairy industry have hugely important contracts with foodservice customer’s right across Europe.

Price plunge

In the dairy sector, the collapse in foodservice is starting to impact dairy prices. In the space of just two weeks, the price of skimmed milk powder (SMP) has plunged from €2,500/t to just €2,000/t today. Whole milk powder (WMP) prices are also enduring a difficult time.

Meanwhile, European butter prices have come back from €3,500/t two weeks ago to just over €3,000/t today. There’s also been a widespread fall in cheese prices across Europe. Cheddar prices have dropped €150/t in the space of week, while mozzarella prices are back as much as €300/t.

Supermarket demand

While the increased demand from supermarkets for butter, cheese and fresh milk has been enormous over the last fortnight, the switch in consumer demand is not yet enough to cover the massive loss in volumes from a collapsed foodservice industry.

It now seems more likely than ever that the European Commission will need to step in and support markets in some shape or form. As things stand, the uncertainty is killing market prices.