W52: Weekly Dairy Update
Milk
After strong demand and high milk prices in the past year in New Zealand, the forecasts show that this situation will be different in the current and 2023/24 seasons. It shows that milk prices stabilized at around USD 5.50/kg (NZD 8.70/kg) for the 2022 campaign and USD 5.69/kg (NZD 9.00/kg) for the 2023 season. This phenomenon is due to a weak global economy, a decrease in global demand, and problems regarding the supply chain. It will equate to a WMP price of around USD 3.5K/MT. The global production conditions are forecasted to improve after severe droughts which might increase volumes and contribute to this projected slowdown in milk prices and might result in even lower than expected farm gate prices.
Germany: Almost 2.9M Cattle in Bavaria in 2022 (Dec 26)
As reported by the Bavarian State Office for Statistics, as of November 3, 2022, 39.8K cattle farms with a total of 2.97M cattle were counted in Bavaria. On average, there were 72 cattle per keeper. Dairy cows made up the majority of the Bavarian cattle population at 37.6%. More than three quarters of the cattle kept in Bavaria are Simmental cattle.
France: French Dairy Herd to Decline by 441K Head by 2030 (Dec 28)
More than one quarter of dairy farms in France closed down over the past ten years, with a further decline expected in the next decade, new insights from the French Ministry of Agriculture have revealed. The ministry’s agricultural census, which is carried out every ten years, has shown that between 2010 and 2020, the number of farms in France decreased by 64K, 13K of which were dairy farms. According to the French livestock farming institute (IDELE), in 2020 there were approximately 3.6M dairy cows and 736K heifers in France, this was 82% and 15% fewer than 2015, respectively. This trend has been particularly prevalent in certain regions of the country including the Nouvelle-Aquitaine, where cattle numbers fell by 45% between 2000 and 2019, compared to a 19% decline nationally. The number of producers in this region has also plummeted, from 8.7K in 2001 to 2.5K in 2019. Furthermore, this trend is expected to continue as IDELE forecasts a further decrease of 441K dairy cows by 2030. The European Milk Board (EMB) has called the national situation “particularly alarming”, and noted a pattern in the age dynamics of these farmers. It stated that of French milk producers, 32% were over 50 years of age in 2010, compared to 48% now. This is even more concerning as the replacement rate for dairy farmers is only 45%.
Poland: Polish Cattle Breeders Are Aware of the Economic Situation and the Future (Jan 1)
Dairy cattle breeding in Poland is at a very high level. Breeders from Poland, who attended the EuroTier fair in Hanover in 2022, really have nothing to be ashamed of. They went there to see what solutions companies were planning for them. They are aware of the requirements placed on themselves and their farms, but they wonder how long the good streak in their industry will last? Milk now pays well and, despite the increase in production costs, producers have some money left over for investments. What keeps them awake at night? They are concerned about inflation, which translates into high credit costs, and growing administration. At every step they are forced to document their actions, because they are constantly subject to various controls. Whether milk purchase prices will continue to remain at a high level depends, among others, on the decisions of Dutch dairy farmers.
Ukraine: The Dairy Industry Has Endured and Continues to Work for Victory (Dec 29)
The year 2022 definitely turned out to be the most difficult for Ukraine and all branches of the economy, including dairy. The milkmen managed to stand up with dignity and, without giving up, continue to work for victory. Despite the reduction in the volume of raw materials and the number of livestock, dairy farms produce high-quality milk, the finished products of which are purchased by European consumers. Yana Linetska, analyst of the Association of Milk Producers According to preliminary data, as of December 1, 2022, 33.6% of all milk was produced by agricultural enterprises, and 66.4% by households. In total, 7.123M MT of milk of all types were produced in 11 months, which is 12.6% less than last year. Of these, industrial farms provided 2.4M MT of milk, which is 7.2% less than last year, and private farms provided 4.7M MT of milk (-16%).
Ukraine: Raw Milk Prices in Ukraine Remain Stable (Dec 30)
By the end of 2022, purchase prices for milk remained at the level of late November to early December. Average values for all three grades of raw materials did not change. This was reported by the analyst of the Association of Milk Producers Yana Linetska. The purchase price for extra grade milk on December 27 averaged USD 0.33/kg (UAH 12.18) without VAT. Processors bought the higher grade at USD 0.33/kg (UAH 12), and the first grade at USD 0.31/kg (UAH 11.6). The weighted average price of the three varieties remained at USD 0.31/kg (UAH 11.92). The situation on the world market currently does not support the purchase prices of milk. However, during the New Year and Christmas holidays, people who left earlier return to Ukraine. This affected the increase in demand in the domestic market.
Kazakhstan: Six Dairy Farms Planned to Open in West Kazakhstan Region in Two Years (Dec 27)
It is planned to open six dairy farms in the West Kazakhstan region at once. “The goal of the project is to reduce the import of dairy products imported from Russia and Belarus. There are 6 dairy farms in the project. Four percent loans will be issued. We will start work next year. We will be implementing the project within two years,” said Arman Utenulov, deputy Akim of the WKO. As specified, last year the region approved the concept of the development of the "milk belt". Within the framework of the project, it is planned to build dairy farms with the provision of preferential loans to peasants.
Indonesia: After the FMD Outbreak, W Java Focuses on Cattle Population Recovery (Dec 31)
The West Java Provincial Food and Livestock Security Office (DKPP) is striving to recover the livestock population in the province following the foot-and-mouth disease (FMD) outbreak by distributing additional cattle. At least 138 imported dairy cows will be provided to breeders in collaboration with the Indonesian Dairy Cooperative Association (GKSI).
Algeria: Demand for Dairy Exceeds Supply (Dec 30)
The Algerian government estimates milk production at 2.5B litres per year. Of that, 73% is cow's milk. Despite being a major world importer, Algeria still does not produce milk powder. The Ministry of Agriculture estimates the need for fresh milk on the domestic market at 4.5M litres per year. Domestic demand is well above production capacity.
Cheese
Ukraine: Soft, Fatty Cheeses in Ukraine Rose in Price by 2.3% In November (Dec 29)
In November 2022, the average consumer price for soft, fatty cheeses increased by 2.3% compared to October, to USD 4.21/kg (UAH 155.24) against USD 4.12/kg (UAH 151.76). Since the beginning of this year, the price of soft, fatty cheeses has increased by 16.2% from UAH 133.6/kg in January.
