Inflation, Chinese import numbers and US milk supply are probably three of the most relevant trends to watch as we ride along a high peak in commodity dairy prices.
The most recent UK inflation figures last week showed prices are up 9.1% to the highest level in 40 years. The dairy category foods – namely butter, yogurt and ‘other dairy’ – outpaced general food purchases.
So will fresh milk prices continue to rise in the UK? Probably, but there is some talk of higher prices burning off demand slightly.
Some of the survey specialists are suggesting that there is already a scramble for value ranges, but the numbers are very small. As the Ornua CEO said recently, maybe consumers will stay with a trusted brand during this period.
China’s imports in May continued where March and April had left off – down 30% and 116,000t to 271,400t.
Whole milk powder (WMP) totalled 48,200t after a 35.2% drop, while skim milk powder (SMP) fell nearly 40% to 25,700t. It was the same story and percentage drop for whey, down to 44,600t. SMP and WMP are the big products – the rest are much smaller in volume.
Cumulative imports for the year now total 1.53m tonnes, which is down 314,200t and 17% on last year.
We are all watching US milk volumes to see what way farmers are reacting where environmental pressures are probably not as big as some other milk-producing regions.
In May, the US was 8.94m tonnes, down 63,000t and 0.7% compared with last year. Cumulative volumes are now 43.16m tonnes, down 409,000t and 0.9%.