What we’re seeing this week
After four negative GDT events, the price index rose 3.6% at this week’s auction. This comes in the context of fairly mixed seasonal conditions around the world and some interesting trends in the US and EU markets.
SMP was the star of the GDT show this time around, surging 8.5% – well ahead of market expectations and stretching the NZ premium over EU-sourced product. WMP gains were more moderate with some countervailing trends in play for major buyer China. Cheese also rebounded after successive falls, adding 7.2% to contract prices on average. Butter was not invited to the party, losing 1.6% and flattening the forward profile for contract prices.
All this GDT action comes amid some interesting trends in European SMP production – which shot up in the recent data – and US butter consumptions which took a fall.
Chart of the week
There are reports this week that Germany’s major grocery retailer (Aldi) has lowered retail butter prices on its private label brands, just as it faces higher wholesale costs. Monthly updates from German analysts AMI reported steady private label retail prices (tracked by Nielsen) from July through April this year (at an average of €1.42/250g). Prices were then lowered in May and June as retailers the world over lifted prices in response to strong retail demand as people remained at home.
The latest listed on-line prices for Aldi’s own brand have been taken down to €1.34/250g, reportedly due to stronger competition from branded lines. Recent intel from Trigona indicates retailers bought butter in September for upwards of €3,600/t, narrowing the apparent margin for the retailer to the lowest we’ve seen in 2 years.
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:
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