What we’re seeing this week
It’s always good in these times to have something positive to talk about – and this week there’s a GDT event that resulted in a 1% increase in the price index. It was largely an SMP-led recovery, with contract prices rising 7.4% on average, in line with firming Northern Hemisphere prices. Steve and Jo discuss some of the more interesting trends in product categories and buyer activities.
In Australia it is the lead up to a challenging season. As some farmers emerge from drought conditions, there is also the realisation given what’s going on in the world that farmgate prices will be under pressure in the 2020/21 season. With the havoc being wreaked on global markets by the COVID-19 pandemic, and the uncertainty over the new mandatory code impacts, you would have to be a mug to try and forecast what the farmgate price. Of course we give it a go!
Chart of the Week
EU-28 exports of SMP fell in double-digits for the fifth consecutive month in March. SMP exports were 65,887t – down 27% YOY. In the quarter to March, SMP exports fell by 24.3% YOY or 63,329t. SE Asia accounted for 74% of that decline.
In contrast, cheese exports continued to improve, increasing YOY in every month since July last year. In March, exports rose 9.7% YOY to 78,105t. CIS, North Africa and South Korea were the strongest cheese trade expansion regions for first quarter, jointly accounting for 73% of the total growth (23,000t). In this period, there was growth in all other regions except Japan and China & HK.
Butter exports continued their recovery, increasing in double digits YOY in every month since April 2019. In this period, EU butter exports rose 86,215t, with most of the growth into MENA (35,000t) and non-EU Europe (13,537t) but with increases in all other destination regions we track. Butter exports rose 83% to 20,608t in March, a 5-month high. WMP exports rose 17% YOY to 24,936t in March, but trends were patchy over the past year. WMP exports were up 6.1% for the March quarter relative to the comparable. Most of that growth was into North Africa (72%), which more than offset falling shipments to the Middle East and Central America.
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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- 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;
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Our Global Dairy Directions provides a:
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