The Outlook Blog

What we’re seeing this week

Our first video back for 2020, and we’re taking five! That is the five big things we’re watching in global markets – which takes us on a tour of hot spots in Europe, New Zealand and China. There’s a lot to watch in the European Union where a mild winter and improving underlying milk price is setting up a strong spring peak.

We also discuss New Zealand weather which has been much more of a lottery this season. There growing concerns about drying conditions (no, really) as the shoulder of the season approaches.

Then there’s an update about Asian Swine Fever (ASF) in China. There appears to be pig herd rebuilding going on, but a protein deficit remains. It’s pushing imports of meat protein higher, but ultimately it seems a recovery in demand for imported feed whey could be on the cards in 2020. This is also bolstered by today’s signing of a phase one trade deal between the US and China, although details remain sketchy.

Chart of the Week

Actually two charts this week!

Back in Europe our estimated commodity milk value, has flattened after climbing for 16 consecutive weeks up to Christmas. In week 2 (ending 11 January), the CMV stood at €34.92/100kg, down €0.05/100kg from the prior week and €0.31/100kg lower than the 2019 peak of€35.23/100kg.

The IFE consultancy in Germany estimates EU raw milk value of €35.3/100kg, based on official butter and SMP prices in the Netherlands, Germany and France. SMP averaged €2,617/t, up €20/t from the week before, while butter fell €13/t to €3,583/t.  The positive trend in the latest week was despite flat butter prices in Germany and Netherlands at €3,650/t and €3,590/t respectively. Dutch SMP prices were also unchanged at €2,600/t while German SMP rose to €2,620/t.

FrieslandCampina cut its guaranteed milk price in January by 0.66c to €35.75/100kg. With last month’s correction the actual decrease is €1/100kg.

In most recent available milk production data, French output rose 1.3% YOY in the week ending 5 January 2020, a 3-week high. German data is available to week 51 (ending 22 December 2019) – supply in that 7-day period was also higher 1.3% YOY. According to daily AHDB milk collections data, UK output fell 0.9% in the first 4 days of January after a 0.8% decline in December.

Freshagenda’s Outlook Blog is our take on this week in global dairy markets, directly from our weekly publication The Dairyglobe, which focus on supply/demand & farmgate prices

Freshagenda’s Outlook Blog is our take on global dairy markets based on analysis of recent data; across dairy production, policies and other events affecting dairy trade and production across the world.

Our weekly newsletter The Dairyglobe is a concise summary of what’s happening in major dairy regions and from our analysis, we choose a chart of the week, which highlights what’s hot right now in dairy.

Freshagenda is a group of food industry consultants and analysts based in Melbourne focusing exclusively on the food industry with expertise in interpreting market and supply chain conditions in a number of food sectors.

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  • identifying drivers of volume and value, including economic and other market influences

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Outlook blog - Commodity Milk Value