Insight Focus
- World dairy demand hit by Chinese COVID policy, economic crisis in Sri Lanka, Ukraine war.
- A strengthening dollar is not good news for US dairy farms.
- European prices were relatively stable last week.
Following Indonesia’s ban on palm oil exports, India has also started to restrict grain exports, indicating that high commodity prices are here to stay, which means dairy production costs remain elevated and are fuelling the current slump in commodity dairy prices.
China’s Dairy Demand Hindered by Supply Chain Disruption
- Fonterra cut its purchase price of milk in 2021/22 due to sluggish demand.
- The milk purchase price remains historically high, however.
- New Zealand dairy prices fell, but the futures price was higher than the spot auction price.
- The butter price has now fallen far below the last GDT auction price, indicating weak physical demand.
- The butter price in the US was better supported than in the other two regions.
- Butter and skimmed milk powder began to stabilize in The European market, while whey dipped again.
