Here is John Hallo in our latest edition of the Inside Track with a global dairy update. WMP held firm, SMP dipped, butterfat stayed balanced, cheese supply grew but demand kept prices steady, and proteins remained bullish as strong global demand continues.
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Hello and welcome to Maxum Foods Inside Track gloomy day here in Brisbane. Mid August spring only round the corner, which means footy finals as well. So everyone’s pretty up and about up here in Queensland. Let’s have a look to see what’s happening in dairy.
Starting off with whole milk powder. So if we look at the GDT last night, we saw a neutral result up 0.3% on the first contract C1 and C2, there was some good demand which means that people are still in a hand to mouth scenario with their purchasing. So demand did surprise a few people last night. The NZX did expect a bit of a dip to 1% to 3% in in whole milk. However, yeah, we did see some solid demand and it did hold up at that neutral result. Some really good conditions in New Zealand, so good milk coming out for the start of the season. So supply is good, but demand seems to be holding up at this stage.
Moving across to skim milk powder, so we saw a negative result last night on the GDT 1.8%. Not a lot of news to come out of skim. In the US, the non-fat market seems reasonably balanced and in the EU much the same. So it’s sorry to say not too much exciting news on skim. It it’s all things seem relatively flat.
Moving across to butterfat, so some mixed results across the globe with butter and mixed conditions. So if we look in New Zealand, good cream supply for the start of the season and good butterfat supply. However, demand is holding up. So we saw a reasonably neutral result on butterfat and AMF last night on the GDT. There is some good supply and obviously coming into the season, so there’s going to have to be some continued demand to hold that price up. If you look over into the States on the back of some really healthy milk flow in June, July, June was up 3%. The US have really looked to the export markets to export fat so that is putting some pressure on global pricing.
Having a look at cheese globally, so in the EU some good Production milk conditions ok over there as well. So it is the first time in a long time where we have the EU, US and New Zealand, Australia all reasonably healthy with milk flow. So supply is reasonably good, but demand is holding up and a lot of people transferring their milk, a lot of processes in the EU transferring their milk into cheese production as that demand holds up. So things reasonably buoyant over in the EU, in the US with that increased milk, we do see a lot more cheese on the export market for now. So that could put pressure on Australia and New Zealand pricing and then over down under in New Zealand, good supply of cheese, but demand seems to be holding up. So reasonably firm pricing with cheese.
Having a look at whey and proteins, so if we look at sweet whey first, there is a lot of competition for that liquid whey, especially in the EU and US markets so whether that goes into a stream of sweet whey or further process into higher proteins, it does put pressure on sweet whey pricing at the moment, puts pressure on supply and and therefore we do see pricing remaining quite firm. If we look at the protein side of things, not a lot different to what we’ve discussed in recent months. So still a very bullish market on WPC and WPI globally and we don’t see that slowing down anytime soon. That demand is quite robust internationally at the moment and that thirst for higher protein products and supplements, it just keeps going on. So unless supply is to correct itself and things ease, we should still see quite a firm market on protein. In summary, across all the global regions, for the first time in a long time, milk supply seems healthy across the EU, US and Australia and New Zealand. So yeah, conditions are good on the supply side, but demand is holding up, so things are quite relatively balanced at the moment. Thanks very much for listening to today’s Inside Track. I hope you have a great fortnight and look after yourself and one another.
