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Rising energy costs in EU could present opportunity for U.S. dairy

A dairy risk advisor says he’s watching how rising energy costs in Europe are impacting global dairy products.

Kyle Schrad with StoneX says natural gas prices in the European Union have exploded as part of Russia’s invasion of Ukraine.

“We do have to keep a little bit of an eye on this, I think it is a little bit of a concern for the market,” he says.

He says energy can cost up to 40 percent of the processing cost of milk powder products.  If rates remain exorbitantly high in the EU, Schard believes U.S. whey products could benefit the most.

“Pretty high cost in order to produce whey powder in terms of your energy levels and it might get to a point where it’s not worth it to actually produce those whey powders,” he says.

Schrad spoke on dairy market factors during a recent global outlook webinar.

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