by Erhard Richarts, Dairy Market Consultant, Chairman of IFE (Informations- und Forschungszentrum für Ernährungswirtschaft e. V., Kiel)
Milk and dairy markets will be characterized in the first half of 2018 by increasing supplies of milk resulting in ongoing growth of dairy production.
- Like in past years most of all additional milk supplies in the EU will be used for additional cheese production and more whole milk powder, absorbing most of all raw milk including the major parts of the additional volumes.
- Also output of butter and SMP will expand in the first half 0f 2018.
- Outside EU milk production will continue to grow, but not as fast as in Europe.
- Domestic demand in the EU will continue to increase at modest rates, which in absolute terms will require a large part of the additional milk volumes.
- Demand for exports will remain strong, also since commodity prices will be closer to international levels than they were in 2017.
- The butter prices will display moderate fluctuations when compared to 2017, but will continue to move significantly above the intervention level.
- Cheese prices will be lower in the first half of 2018.
- EU prices of SMP and other nonfat dairy commodities EU will be the lowest of the last decade and continue to be very close to the international level.
- Milkfat values are underpinning farm milk prices, but…
- … large stocks of SMP are overshadowing the markets and do not leave space for a sustainable recovery of prices in the nonfat sector.
Read the FULL VERSION OF THE REPORT with the complete analysis of the market trends for the first half of 2018