The Outlook Blog

What we're seeing - 14 May 2019

We have travelled to Chicago, IL and Grand Rapids, MI over the past two weeks, attending dairy industry conferences that covered US dairy policy settings and the market.

It’s been a fascinating time, through snow, heavy rain and sunshine – ie spring in Chicago! So this week we thought we would share some of the take-aways from our trip.

Firstly, what’s keeping some of the leading dairy minds in the US awake at night. Then we share the vibe from the largest annual gathering of the US dairy industry on the market outlook. Oh, and we do it all in our active wear!

Chart of the Week

US dairy farmers are feeling the pinch after several years of low milk prices. Falling fluid milk consumption has eroded the Class I milk market. Low beef prices and a flooded heifer market have eroded cattle and land values.

After 38 consecutive months of year-on-year expansion, US milk production was down 0.4% in March as these pressures finally impacted. There’s an improved outlook for milk prices on the back of a firmer cheese market which will flow through to farmers in coming months. Will it be enough to return the sector to expansion mode?

Two dudes talking about dairy markets

This episode was such a blockbuster, it has taken us some time to upload, but it’s definitely worth the wait. Freshagenda Director Steve Spencer chats to Anup Singh of Chicago-based Solera Advisors.

Solera is a commercial and risk management advisory with a focus on agricultural markets. Solera Advisors seeks to help its clients generate risk adjusted returns through employing a range of strategies sensitive to global macro, fundamental and relative value analysis and cross asset arbitrage balanced by capital preservation techniques.

In other words Anup knows alot about global dairy markets and how to deploy risk management tools to manage volatility! This is a fascinating discussion covering the fundamentals of SMP, WMP and cheese markets

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.

We specialise in food and have a working understanding of the market dynamics affecting food industry sectors and supply chains. We are a leader in mapping and profiling agribusiness value chains in Australian and global contexts – and helps you understand and interpret value chains better.

Our experience spans a variety of sectors such as dairy, meat, grains, seafood, fruit and vegetables, cotton and other processed foods. By taking a whole-of-chain approach based on commercial reality as to how things work, we map out food value chains in the food industry in terms of:

  • the structure of sectors from farm to consumers;
  • product volumes flowing through various channels to the consumer (domestic and export);
  • estimating prices at key points and costs;
  • how value chains operate in key food categories and nature of commercial relationships between supply chain participants;
  • identifying drivers of volume and value, including economic and other market influences

Freshagenda has developed Global Dairy Directions; which consist of a range of product options to give clients insights in global dairy markets.

Our Global Dairy Directions provides a:

  • continuous, rolling outlook for the global dairy market – in the short and long term;
  • A framework of analysis that provides a holistic view of the total market, as well as in key production and market regions;
  • A simulation platform which allows users to readily assess the sensitivity of the outlook to change, and to create and test future scenarios;
  • An efficient and convenient resource designed to support and inform risk management, planning & budgeting, and in-house analysis;
  • A platform that provides robust indicators of market tension, projected commodity values and trends in supply and demand

It’s available to clients in a number of different ways, depending on their requirements and resources.

Outlook blog - Commodity Milk Value