Here is John Hallo in our latest edition of the Inside Track, sharing updates on global dairy markets. In Edition 177, John covers flat whole milk powder results on the GDT, flat trends for skim, pressure on global fat and cheese pricing and continued strong demand for proteins. With solid milk supply across all major regions, market sentiment remains cautious but balanced.
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Hello and welcome to today’s Inside Track. It’s absolute cracking day here in Brisbane today so spring is well and truly upon us. Brisbane in both finals as well so everyone’s up and about here in the, with the footy codes. Brisbane Lions playing this weekend in the prelimb against Collingwood and Brisbane Broncos in the qualifying final next weekend so plenty to look forward to at the moment. Let’s have a look at, see what’s happening in dairy.
Having a look at whole milk powder, so the GDT held up quite well last night against expectations. The futures market were predicting a 3-4% decline, however it was just 0.8% down on last fortnight. We saw Middle East and Southeast Asian markets come back, they were absent at the last GDT, however they came back. North Asia were a little down in their purchasing, however it was better than expectations, so yeah, a few good encouraging signs there from the last GDT obviously we saw that decline. So with new season milk coming on, New Zealand having a good start to the season. There is plenty of milk about globally across all the markets, so we did predict that it could have been a bit bearish than what happened last night. In terms of a short to medium term outlook, it still has some bearish sentiment to it. However, good positive signs last night on the GDT.
Moving across to skim and non-fat, I’ve looked on a global scale, supply good in the EU and the reasonably flat pricing. If you look over in the US, much the same. In Australia, New Zealand, after two very sharp declines on the previous two GDTs, we did see it flatten out with a relatively even result last night. Not a lot of excitement or news either way, looks to be a reasonably flat out look for skim.
Probably the most topical of the commodities at the moment, butter fats, if we look over in the US with some low feed pricing, that fat content in the milk has increased significantly along with milk in general. So with that component increase, we have seen a lot more export fat on the global market. So pricing as low as it’s been in quite some time in the US. In the EU, we saw a rapid decrease in pricing. It’s still above Australia and US and New Zealand levels. However, we see bearish sentiment on fat in the EU. On the GDT last night, we saw a mild decline on AMF and butter. That want or demand for NZ butter out of North Asia really does drive that GDT and drive that Kiwi pricing. It’s still quite a bullish outlook for New Zealand Australia butter. However, we do see some pressure or price pressure from the EU and the US.
Moving across to cheese, we look in the EU, some good milk flow, they did have a good season there with milk up, so supply is good, demand wavering, so we see a bearish conditions over in the EU on cheese. In the US a similar story, good milk, good supply, demand domestically and export reasonably bearish, so yeah some lower prices there as well. Australia and New Zealand, we are coming into the Christmas period, so domestic demand has been reasonable, however there is a bit of product on the market globally, so this may keep prices reasonably flat.
Moving on to sweet whey and proteins. If we’re looking at the supply of liquid whey, so obviously good cheese supply both in the EU and the US, therefore liquid whey is in good supply. However, most of that liquid whey is going into WPC80 or WPI streams, so further value added. So we may see some pressure or some bullish conditions on sweet whey over the little while purely based on that supply going more to those higher protein channels. On the protein side of things, yeah, not a lot of change WPI, WPC still in good demand along with our milk proteins as well, so that ready to drink market and the sports nutrition market still booming globally and doesn’t seem to change.
Thanks very much for listening to today’s Inside Track. Go the Lions, go the Broncos and hopefully we’ll be a happy Brisbane people in the fortnight’s time when we speak again.
All the best. Look after one another and yourself and we’ll see you soon.
