News

Market analyst says production slowdown helped boost global dairy prices

Tuesday’s Global Dairy Trade index rose nearly 5% and was only the second time since March the index went up.  Market analyst Jon Spainhour from ever.ag tells Brownfield several product categories saw gains. “The auction, in general, was very strong as well as specifically whole milk powder being up 5.1%. Cheese was up 1%, butter up 3.3%, and AMF (Anhydrous milk fat) up 14%.”

Spainhour says one reason the dairy product prices are going up is milk production is not growing, especially in foreign countries with environmental restrictions. “France this week is down 2.5%. The Dutch have been lower. The English have been lower. If we go over to New Zealand, they’re down almost 5%.”

And, Spainhour says in the U.S., milk production during July only grew by point-2 percent.

On the demand side, Spainhour says U.S. domestic demand has been good. Overseas, he says the usual buyers of whole milk powder and nonfat dry milk are still dealing with COVID lockdowns. “The Chinese really weren’t there, however, there are other parts of the world, Southeast Asia and the Middle East, they will import a lot of product from Europe.”

With the European supply line slowing down, Spainhour says many buyers looked to New Zealand, which brought GDT prices up.