Warrnambool meat processor Midfield Group last week unveiled an ambitious plan to build its own milk powder plant to tap into booming demand
for dairy commodities throughout Asia.
The world's biggest dairy exporter, New Zealand's Fonterra, has lifted its forecast farmgate milk price to a fresh record as demand
for dairy commodities outstrips supply.
The Victorian farm gate milk price is highly sensitive to export prices
for dairy commodities, such as powders, in the international market.
The Victorian co-operative's managing director, Gary Helou, said strong global demand
for dairy commodities had helped drive a $ 207 million rise in half - year revenue to $ 1.24 billion.
The world's biggest dairy exporter, New Zealand's Fonterra, has lifted its forecast farmgate milk price to a fresh record of $ NZ8.65 ($ 8) per kilogram of milk solids as demand
for dairy commodities outstrips supply.
Fonterra is launching a new online sales channel
for its dairy commodities which will allow it to respond more quickly to price changes - and may spur the development of an international dairy futures or derivatives market.
Dairy farmers patience has been wearing thin as market indicators
for dairy commodities soar to levels not seen since the highs of 2013.
The WCB bidding war for Australia's oldest dairy attracted international media attention and underscored the value industry players see in soaring demand
for dairy commodities such as milk powders, cheese and infant nutritionals in Asia, and China in particular.
A European Commission report says the world market
for dairy commodities and milk imports will grow 2.4 % annually up to 2025.
The strong demand
for dairy commodities like milk powders has been highlighted by the intense bidding war for Warrnambool Cheese & Butter.
Demand for whey - derived functional food and drinks claiming nutritional benefits remains undimmed despite an overall fall in sales last year
for the dairy commodity, says an industry analyst.
Not exact matches
He is a best selling author and his book
Dairy of a Professional
Commodity Trader was Amazon's # 1 ranked book on trading
for 27 weeks.
Whether it's China's demand
for imported milk products, the weather situation in New Zealand, or changes in world
dairy commodity prices, this publication keeps members abreast of the market situation and outlook.
It's why our Spot Market is the industry's only trading exchange
for bulk
dairy commodities.
But with the majority of
dairy farmers supplying to Murray Goulburn and Fonterra, and the bulk of these companies» operations being focused on milk
commodities for export, fresh drinking milk is a very small part of the picture
for most
dairy farmers.
«The continued expansion of world demand, resulting from global population and economic growth and increasing preference
for dairy products are expected to be the main drivers, fuelling EU exports and sustaining
commodity prices,» said the EC report.
For John's detailed month - by - month examination of American
dairy commodity movements, visit MilkPrice.
But the New Zealand
dairy giant's chief executive Theo Spierings, said this was too high and did not reflect a collapse of global prices
for key
dairy commodities.
He said this was because the co-operative was shifting away from producing
commodity products, which now account
for about 30 per cent of its total production, and had not sold anything on the Global
Dairy Trade auction since 2013.
Explaining more about the concept of
dairy futures, he added: «A processor and manufacturer are afforded the capability to hedge their market risk, locking in a longer term price
for a
commodity, be it skimmed milk powder, butter or cheese.
Fonterra's preference was unlikely to be an all - company bid
for MG, as the latter's liquid milk and «
commodity» dry milk powder processing plants did not fit Fonterra's three preferred verticals, said Rabobank senior
dairy analyst Michael Harvey.
But he warned that could slide to $ 5.60 - $ 5.90 a kilogram if global prices
for key
dairy commodities did not improve as expected.
For part two of John's monthly
commodities update, including an analysis of US cheese exports compared to other major
dairy producing countries, visit www.dairyreporter.com tomorrow (Wednesday 6 March 2013).
For example, he said while China brought in 50 per cent less
commodities in the past 12 months, it bought 50 per cent more
dairy foods compared with 2014.
[The price of]
commodity dairy ingredients namely skim milk powder and whole milk powder... is at historic lows and is looking like staying there
for a while because of the change in buying patterns in China and the embargo in Russia.
In May of this year, US - based cooperative
Dairy Farmers of America, was forced to deny allegations of any wrongdoing over price fixing
for some of its products, amidst an ongoing enquiry by the Department of Justice and the
Commodity Futures Trading Commission (CFTC).
Revenue totalled $ 263.6 m (A$ 366.8 m) in 1H FY2016, down 1.5 % from 1H 2015, with weak
dairy commodity prices
for bulk cheddar cheese and whey powder adversely impacting sales revenue.
The moves show how Britain's
dairy processors are trying to address a general trend towards branded and added value
dairy products across the European Union, spurred on by price cuts
for commodities in the bloc's Common Agricultural Policy reform.
At times, industry language doesn't quite match kosher language, and seemingly innocuous
commodity ingredients, whose sourcing is often not a major concern
for dairy processors, suddenly becomes an issue
for OU Kosher -LSB-...]
INVESTORS and
dairy farmers are bracing
for the worst from Murray Goulburn as weak
commodity prices, rising debts and the soaring dollar look set to savage the co-operative's earnings and milk price forecasts.
Dairy products are New Zealand's largest commodity export and lower global prices are putting pressure on the nation's dairy farmers, weighing on the outlook for economic growth and putting dairy sector debt on the Reserve Bank's radar as a growing risk to financial stabi
Dairy products are New Zealand's largest
commodity export and lower global prices are putting pressure on the nation's
dairy farmers, weighing on the outlook for economic growth and putting dairy sector debt on the Reserve Bank's radar as a growing risk to financial stabi
dairy farmers, weighing on the outlook
for economic growth and putting
dairy sector debt on the Reserve Bank's radar as a growing risk to financial stabi
dairy sector debt on the Reserve Bank's radar as a growing risk to financial stability.
Westland Milk Products, New Zealand's second biggest
dairy co-operative, has announced a drop in its pay - out predictions
for 2015 - 16, saying a forecast 15 to 25 % reduction across all
commodity products
for the remainder of the season is the driving force...
For John's detailed month - by - month examination of American
dairy commodity movements, click here.
The US
dairy sector will likely invest in additional churning capacity to meet demand from the now «proven» export market
for butter, says DairyReporter.com
commodities expert, John Geuss.
Mr Rowley and ADF's three other directors hope to capitalise on Asia's appetite
for dairy, particularly infant formula, which the Australian government's
commodities forecaster ABARES isn't expecting to slow down soon.
Lactalis, which owns France's well - known President and Société brands, said that price differences between regions and individual processors left the French
dairy industry more exposed to recent EU subsidy cuts
for commodity products.
Meanwhile, Mars Ice Cream is concerned about
commodity prices and plans to continue watching international demand
for dairy inputs that carry potential to drive up costs.
WCB chief executive David Lord said strong international
dairy commodity pricing and demand and the declining Australian dollar were a tailwind
for earnings.
The outlook
for international
dairy commodity prices has deteriorated since the September 11 terrorist attacks.
Milk Link CEO Neil Kennedy says market conditions
for the next year will likely remain challenging with
dairy commodity returns «sharply down» in comparison with historical prices in the short term.
The majority of internationally traded
commodity dairy products traded in the latest Fonterra Global Dairy Trade auction event sold for higher prices, arresting a series of price slides dating back to Decemb
dairy products traded in the latest Fonterra Global
Dairy Trade auction event sold for higher prices, arresting a series of price slides dating back to Decemb
Dairy Trade auction event sold
for higher prices, arresting a series of price slides dating back to December 6.
Dean Foods is projecting double digit operating income growth in 2012
for its fresh
dairy segment as raw milk
commodity pricing becomes more «stable.»
While conventional
dairy processors continue to fret over increasing prices
for milk powder and other ingredients, a leading US organic group believes that current conditions in the
commodities market will continue to boost industry...
Fonterra chairman John Wilson says there is less global demand
for commodities, including
dairy.
Michael Harvey, a senior analyst (
dairy) with Rabobank, said he was optimistic
for the Australian industry after global
dairy commodity prices started to firm from the middle of 2016.
He adds: «The project has been developed in order to achieve the relevant objectives identified in the Strategic Action Plan
for the Welsh
Dairy Industry to increase efficiency and to add value to
commodity produce in order to gain the maximum advantage.»
In the 216 years since European occupation and colonization of Australia, huge changes have been wrought upon the landscape, many of them driven by an agriculture that has largely been oriented towards production of
commodities — wheat, sheep, beef,
dairy, sugar —
for export.
The press release sent by Gillibrand's office notes she is the first New York senator to serve on the Agriculture Committee in nearly 40 years, and says she and Hanna will be announcing a new effort to change the federal school lunch guidelines to make Greek yogurt — New York's hottest
dairy commodity these days — more affordable
for schools.
Four additional carbon offset methodologies are currently in ACR's approval process
for publication in 2013 including California and Mid-South modules
for Emission Reductions in Rice Production, a modular approach to Grazing Land and Livestock Management in beef and
dairy production, a methodology
for Avoided Conversion of Grasslands and Shrublands to
commodity crop production, and a methodology
for quantifying emissions reductions from Carbon Capture and Storage in Oil and Gas Reservoirs.