Tridge Analysis: International Milk Prices and Volumes Fell for the Second Time in March at the Global Dairy Trade (GDT) Auction (Mar 22)
The March 21st edition of the Global Dairy Trade Auction ended with a fall across the board in dairy product prices. The GDT price index fell for the second time this month, down 2.6% with an average selling price of USD 3,361/MT. At event 328, three products, buttermilk powder, lactose, and sweet whey powder were not offered but all others sold saw big losses. Market undertones remain unsettled, but increased milk collection numbers going into the spring flush in Europe could add bearish sentiments. Much will now depend on demand from China and Chinese domestic policies which should move global dairy commodity prices. Demand for dairy products from the food services industry should also help move prices into the spring flush. (Continue Reading)
Hardly Fewer Dairy Cows (Mar 20)
On 1 April 2022, the Netherlands had 3.8M cattle, 0.4% more than a year earlier. Compared to 2017, there were 6% fewer cattle. Last year, 41% of the number of cattle consisted of dairy cows, just like in 2021. The municipalities of Sûdwest-Fryslân and De Fryske Marren had the most dairy cows in 2022, 65.6K and 35.5K respectively. Young cattle for dairy farming increased last year by 1.6% to 982K. In 2017, the phosphate reduction plan for Dutch dairy farming came into effect. Companies had to get rid of dairy cattle to stop the herd from growing. The number of cattle fell below 4M in 2018 for the first time since 2013. Last year there were 14.7K farms with dairy cattle, 3% less than in 2021. Compared to five years earlier, this has decreased by almost 20%. The average number of dairy cows per farm grew to 107 in 2022. A year earlier this was an average of 103 per farm and in 2017 a farm with dairy cattle had 94 dairy cows. In 2022, the largest farms with an average of 151 dairy cows per farm were located in Flevoland, followed by the northern provinces of Groningen (128), Fryslân (125), and Drenthe (121).
Action Needed to Secure Buy-in From Skeptical Farming Sector on Green Measures in Ireland (Mar 20)
A new era began for Ireland and particularly for Irish agriculture in 1973, with entry to the then EEC offering attractive and guaranteed terms to major market outlets. Initial expectations were quickly realized. The raising of farm incomes to a level far exceeding what it otherwise would be outside the community has been the most significant impact of EU membership on Ireland. That contribution was particularly transparent in the past 20 years or so when direct payments from the CAP regularly accounted for over half of the total farm income and occasionally much more when farming had a difficult market year. With the rapid expansion in other sectors of the economy, the role of agriculture in the national economy has inexorably declined in common with that in virtually every other country in the developed world. Some structural features of farming have changed greatly since EU entry. The big beasts in agriculture now are cattle and milk production, accounting for up to 70% of total output. Currently, these enterprises occur on over 80% of holdings with 17K dairy farms and 85K non-dairy cattle farms.
Royal GD Points to Risk of Introduction of Besnoitiosis (Mar 24)
For the past 15 years, there has been a clear advance of the bovine disease besnoitiosis. The number of infected cattle in Belgium has risen sharply in recent years, as a result of the import of animals that turned out to be infected. Besnoitiosis mainly occurs in beef cattle, but cases have also been reported in dairy cattle. Besnoitiosis is caused by the parasite Besnoitia besnoiti. Blood-sucking insects spread it. Another route of contamination is the reuse of hypodermic needles. The average time between infection and outbreak of the disease is 13 days but can be up to two months.
In UK, 28 Fewer Scottish Dairy Farms by 2022 (Mar 20)
In 2022, there were 28 fewer Scottish dairy farms and 799 fewer dairy cows. The high production costs and lack of labor are mainly to blame for this. Although overall numbers have fallen, the latest figures from the Scottish Dairy Cattle Association for 1 January 2023 show that the average herd size had increased and now stands at 222, 6 more than a year ago. On January 1, Scotland had 178.56K dairy cows. Scotland now has 804 dairy farms. In the last ten years, the number of dairy farms has decreased by 223.
Dairy Demand Through Retail Subdued as Shoppers Scale Back (Mar 22)
The decline in volume for dairy also relates to how consumers are using dairy products in their homes. Overall spending increased as average prices increased although, with this, there is an indication of consumers' trade down in dairy. Spending on cow's milk increased by 19.2% due to a 26.9% increase in average price to USD 0.84/liter (£0.78). This equates to a 16% increase in last year’s price. Volumes declined by 6.1% YoY because, while 98% of households still bought milk in the last year, shoppers have dropped how frequently they buy it from 66 to 64 times on average per year, still more than once a week on average. Semi-skimmed milk accounted for 62% of milk volumes but drove 65% of the decline. Kantar data shows volumes of cheese declined by 4.0% YoY with cheddar seeing the biggest losses, closely followed by specialty and continental varieties. Processed cheese was the only category where there was volume growth as more shoppers purchased sliced cheese. Average price rises of 13.6% YoY led to a 9.1% increase in total spending on cheese. Despite seeing the heaviest declines in sales, Cheddar continued to account for 49% of cheese volume sales.
Marginal Growth Expected in GB Milk Production for the Upcoming Season (Mar 23)
GB milk production for the 2023/24 season is forecast to reach 12.46B liters, 0.5% more than the current milk year, according to the UK March forecast update. The current season is expected to finish at 12.39B liters, up by 0.2%. The improvement in yields seen since September 2022 has boosted the current season total, which was running behind throughout the first half of the season by around 1-2%. The improvements in milk production in the second half of the 2022/23 season were predominantly driven by higher yields, encouraged by the high milk prices paid through the winter months. Cow numbers were relatively stable, with the size of the GB milking herd in January 2023 only 0.8% lower than a year earlier.
Dairy Exports Start Strong in 2023 (Mar 20)
US dairy exports started strong in 2023, increasing 16% YoY in volume in January on a milk solid equivalent (MSE) basis (+25.03K MT swt MSE) and 21% in value (+USD 121.4M). The main US product categories, cheese, skimmed milk powder, and whey, grew double digits, even as sales of high-fat milk products, such as butter, anhydrous milk fat, and whole milk powder, had difficulties. Skimmed milk powder volumes continued to recover after being the only major product category to contract in 2022. In January, exports increased by 15% YoY(+8.81K MT swt) due to strong demand from Mexico. Whey, in all its forms, from permeate and sweet whey to WPC80 and WPI, continued to perform well (+12%, +4.35K MT swt for low protein varieties and +14%, +569M swt for WPC80+).
Incremental Gains for February Milk Production in US (Mar 20)
Milk production during February increased slightly less than 1% because of a larger, more productive herd. USDA says production in the US totaled nearly 18B pounds with production per cow up 7 pounds from last year. The herd size increased by 37K head in the year and 12K from the previous month. South Dakota and Iowa producers alone added 32K dairy cows in the last year. South Dakota again had the largest increase in overall milk production during February, up 9%, followed by Iowa, up nearly 7%. Florida reported the largest decrease, down more than 14%. Michigan remains the leader in per-cow output at 2.29K pounds per cow, more than 200 pounds above average.
Weather Puts a Lid on February Milk Production Growth (Mar 21)
With wet weather impacting cow comfort and productivity in the West, February 2023 growth in cow numbers was partially offset by a minimal increase in milk output per cow, slowing overall growth in milk production compared to a year ago. USDA estimates that milk production will amount to 17.675B pounds for February 2023, up 0.8% YoY compared to February 2022. Furthermore, USDA estimates cow numbers at 9.417M head, up 37K from a year earlier and 12K more than in January. US cow numbers were the highest since May 2022. Among the 24 major dairy states, in February 2023, cow numbers were estimated at 8.939M, up 54K from February 2022 and 12K more than January 2023. Cow numbers in those states were the highest since August 2021.
Wisconsin’s Milk Production up Slightly (Mar 21)
Wisconsin’s milk production for February was up slightly from last year. USDA’s state statistician Greg Bussler says the Dairy State’s production was 2.45B pounds last month. He says the state’s average number of cows in February was 1.27M head, just like it was in January, but 3K fewer than in February of 2022. Production per cow increased 10 pounds over last February, with each cow averaging 1.93K pounds of milk per month. That’s almost 224 gallons per cow every month or around 7.5 gallons a day.
The Number of Cows Dropped in February and Is Now 3.2% Lower (Mar 20)
The decrease in the number of cows and heifers in Spain makes it clear that producers are not willing to continue producing at a loss and that they prefer to sell their animals for meat rather than continue taking out loans so that the industry and distribution can continue to maintain their margins. In March 2023, the dairy cattle census in Spain was 784.85K cows, which represents a drop of 3.2% compared to the same month of the previous year, and to February, there is a drop of 0.3%. There are already 25.64K fewer cows. Regarding the census of heifers, in March 2023 it reached 271.14K animals, which represents an increase of 0.8% compared to the same month of last year and a decrease of 0.7% compared to the immediate previous month. Last year, 7% of livestock farmers also disappeared, 790 farms, and although one might think that this trend would be corrected with the price paid during January, the reality is quite different, and that month another 90 farms were closed, 3 per day.
In Sweden, 93% Of Farms Have Given up Dairy Farming (Mar 20)
Over the past 30 years, 93% of dairy farms have ceased production. First of all, the number of dairy farms in Sweden has decreased significantly over the past twelve years. During this period, a total of 2.82K companies resigned from production. Since 1982, the size of dairy farms has also changed significantly. Whereas 30 years ago farms had an average of 16 animals, today the average herd size has increased to 106 animals per farm. In addition, the average milk yield of cows has increased from over 5K to 9K kg of milk per year per cow. Compared to the decline in dairy farms, the number of dairy cows has only decreased by 55%. While 30 years ago there were 665.19K cows, the number of dairy cows kept in 2022 was 296.54K. In the last ten years, about 44% of farms stopped production and the number of dairy cows fell by 50K more. The average herd size was then 23 heads.
Milk Price Rose in February (Mar 24)
Dairy derivatives prices rose in February, reflecting the lower production of raw milk in the countryside. According to Cepea research, carried out with the support of OCB, the average prices of long-life milk (UHT), mozzarella cheese and powdered milk (400g) negotiated between industries and distribution channels in the state of São Paulo recorded increases of 9 .8%, 4.5%, and 1%, respectively. Thus, in February, the value of UHT had an average of USD 0.86/liter (R$ 4.44), mozzarella, USD 6.06/kg (R$ 31.30), and powdered milk, USD 5.80/kg (R$ 29.95). The Dairy Derivatives Price Indicators refer to negotiations carried out between dairy products and distribution channels in the State of São Paulo. Monthly averages are obtained from daily averages, in the case of UHT milk and mozzarella cheese, and from weekly averages, in the case of powdered milk (400g). The increase in the monthly average, however, did not mean heating the market throughout the month.
Kenyan Government Has Lifted a Ban on Importation of Milk Powder From Uganda (Mar 22)
The Kenyan government lifted a ban on the import of milk powder from Uganda on March 15, 2023. Kenya put a total ban on all importation of milk powder into the country on March 9, 2023. However, after ongoing bilateral talks between relevant ministries in both countries, a decision has been reached to lift the ban on Uganda's powder milk. Kenya is one of the biggest buyers of Ugandan milk valued at USD 32M on average annually. The ban could have negatively affected the dairy sector in Uganda which is slowly recovering after being hit hard by the COVID-19 pandemic and prolonged drought in the country.
Uganda Looks to North Africa for a Market for Its Milk (Mar 20)
Uganda seeks a market for milk in North Africa after a constant trade war with its East African neighbor. In W12, President Yoweri Museveni visited Algeria, where he signed a deal with Abdelmadjid Tebboune to sell agricultural products, including dairy products, and to strengthen cooperation in other areas of agriculture, such as animal health. But this came shortly after Kenya closed and then reopened its doors to Ugandan milk powder, citing a decision to protect local producers. During his stay in Algiers, President Museveni said Algeria’s cooperation with the East African Community could create a strong economic development cluster, according to a statement issued by the Ugandan parliament. Ugandan Agriculture Minister Frank Tumwebadze said the move would provide an alternative market for Ugandan farmers and milk processors.