W18: Dairy Update

Publicado May 9, 2023
W18: Dairy Update

In W18 in the dairy landscape, Tridge’s analysis indicates that the GDT price on May 2nd reached USD 3,506/MT, up 2.5% from the previous auction, following a 3.2% rise in the previous event. All products offered saw strong gains except anhydrous milk fat, which fell by 2.4% with an average price of USD 4,832/MT. Foresight practitioner, Melissa Clark-Reynolds, warns that the rapid growth of precision fermentation technology that produces dairy products in a laboratory rather than from a cow is expected to be a significant disrupter for New Zealand’s dairy industry. This technology has had massive growth investment over the past five years, involving dairy products grown from microbes in a vat. The dairy ingredients market is expected to be affected the most by this new technology rather than whole milk. Milk prices are also anticipated to shift as the cost of this technology falls, given that many of the ingredients are derived from milk. In Q1 2023, Dutch dairy farmers supplied 3.555B kg of milk to dairy processors, up 4.1% compared to Q1 2022. March milk supply increased by almost 4% YoY, illustrating a continued uptrend since June 2022. A new UK-based research project, seeking to understand and address the causes of dairy cow heat stress within farm buildings, received a USD 1.37M funding boost from the Biotechnology and Biological Sciences Research Council (BBSRC). The USDA reports that US replacement dairy cow prices in April 2023 averaged USD 1.72K per head, unchanged from January 2023, but up 10% from April 2022. US quarterly average prices amounted to USD 1.72K over the past four quarters, about 19% below the last peak of USD 2.12K per head in October 2014. This is linked to weakening milk prices and tightening income margins that kept the lid on US average prices for dairy replacement cows, while average cull cow prices continue to climb.

In Q1, Ukrainian non-condensed milk and cream exports reached 8.1K MT, valued at USD 4.7M, 2.3 times more in volume, and 1.9 times higher in value than in the same period in 2022. The shipments were mainly destined for Moldova (91.3%), Georgia (4.1%), and Armenia (2.6%). On the other hand, Ukrainian condensed milk and cream exports in the first three months of 2023 totaled 6.8K MT, worth USD 17.7M, 1.9 times more in volume, and up 50% in value compared to Q1 2022. Poland (21.7%), Israel (10.2%), and Bangladesh (9.1%) bought the most condensed milk and cream in Ukraine during this period. In January-March 2023, dairy farmers in the Krasnodar territory in Russia increased their milk production to 433K MT, up 9.1% compared to the same period in 2022, with large and medium-sized enterprises reaching 307.5K MT and small forms of management clocking 125.5K MT. The average daily milk yield per cow in the period was 27kg, up from 24.7kg at the end of last year. The region expects to increase milk production by the end of 2023 to 1.66MMT, up 5% YoY. Lastly, in Q1 2023, Zimbabwe’s milk production totaled 22.62M liters, up 5% compared to Q1 2022, while March's milk output amounted to 7.51M liters, up 8% MoM and 2.3% YoY. This is attributed to the Zimbabwean government and other stakeholders' efforts to improve raw milk production through initiatives such as training farmers on best practices and providing them with better genetics for their dairy herds. This came amid various challenges facing the Zimbabwean dairy industry, including high production costs, low productivity, and limited access to finance and markets. However, Zimbabwean retailed raw milk in the first three months of 2023 totaled 1.86M liters, down 15% compared to 2.19M liters in Q1 2022. 

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