Poultry
xClose

Loading ...
Swine
xClose

Loading ...
Dairy & Ruminant
xClose

Loading ...
Aquaculture
xClose

Loading ...
Feed
xClose

Loading ...
Animal Health
xClose

Loading ...
Undefined
 
Livestock & Feed Bussiness Worldwide: August 2017

Dairy exporters wake up to a brave new world

 
by Eric J. BROOKS
 
 
After three years of intense deflation, the world dairy market has finally turned the corner. Demand is growing at a healthy pace, prices are firming up and look set to do so for several years.
 
Even so, exporters are waking up to a world where everything from market preferences to their own competitive position is undergoing profound changes.

Demand-wise, processors must adapt to a shift away from commodity dairy powders and towards fluid milk or products with exceptionally high fat or protein content.
 
Butter, which once had the lowest trading price of any major dairy good, now leads the market trend.
 
On one hand, from a peak price of US$4,290/tonne in 2013, WMP sold for 45% less at US$2,361/tonne in 2016. SMP fared even worse, falling 53% from US$4,149/tonne in 2013 to US$1,967/tonne last year.
 
On the other hand, butter rose 43% in four years, from an average just under US$4,000/tonne in the year before the dairy market crash to approximately US$5,750/tonne today. Similarly, despite the depressed market for dairy powders, cheese’s US$4,250/tonne cost is nearly unchanged from its peak price at the top of the dairy market boom.
 
Moreover, with consumers in exporting countries themselves suddenly demanding more fat in their milk and using more butter in their cooking, producers are finding it difficult to secure enough fatty feedstock to satisfy rising export demand.
 
This market transformation's complexity is further compounded by a shifting competitive landscape between the New Zealand, America and Australia, three nations that account for most of the world’s dairy exports. One day, the Trans Pacific Partnership’s cancellation may be seen as a blessing by dairy producers in New Zealand and especially Australia, which is caught between failing pastureland and an inability to transition to feed-based dairy production.
 
We examine how all these factors are changing the competitive landscape for the top three dairy exporting nations in the pages that follow.
 
 
The full article is published on the August 2017 issue of LIVESTOCK & FEED Business. To read the full report, please email to inquiry@efeedlink.com to request for a complimentary copy of the magazine, indicating your name, mailing address and title of the report.
Share this article on FacebookShare this article on TwitterPrint this articleForward this article
Previous
My eFeedLink last read