Global Dairy Dynamics – Montly Newsletter March 2021

GLOBAL WEATHER HIGHLIGHTS

  • Before monsoon, India can expect pockets of moderate deficit across its central breadth and north, reaching into western Nepal. Elsewhere in South Asia, moderate deficits are also forecast for southern Pakistan’s pockets, but moderate to severe surpluses are forecast in Sri Lanka.
  • The United States Great Plains and Texas will be moderately warmer than usual. The Great Lakes States can expect severe warm anomalies leading to the East Coast. The Deep South will also be warmer than usual, with severe anomalies and outer pockets in central Georgia, the Gulf Coast, and central Florida.
  • South America is expected to be wetter than usual.
  • East Asia is drier than usual. In Southeast Asia and the Pacific, some pockets of a moderate deficit are expected in northern Myanmar and moderate surpluses in southeastern Cambodia and pocketsof Indonesia.
  • Western Australia will be moderately wetter thanusual, while some scattered pockets of a moderatedeficit are expected across the north.
  • Europe indicates severe to extreme warm anomalies in Scandinavia and generally moderate warm anomalies in the Baltics, Belarus, and northern Ukraine. England will be moderately warmer than usual, with conditions reaching across the Northern Sea to Belgium and the Netherlands, but Scotland and Ireland could see severe anomalies. Moderately warmertemperatures are expected in much of France.

EU MARKET UPDATE
In Germany and France, the two largest milk- producing countries in Europe, reports suggest this year’s supply sofar is down 2% to 3%, which is significant, but a slow recovery is being expected. Reports suggest that inferior fodder quality in France and rising feed prices hinder milk production, despite the robust milk price outlook. Meanwhile, European dairy prices lifted further this week. European cheese prices continue to rise, but cheddar is now priced at just under €3,400/t. Butter prices shot up 8% this week to more than €4,000/t, while milk powder prices also posted healthy growth.
Dairy market traders will remember when butter prices spiked to record highs of €7,000/t not so many years ago, which could drive short-term demand for butter as buyers try to lock down supply at current price levels. Overall, the outlook remains highly positive for Irish milk prices in the first six months of 2021.

US MARKET UPDATE
As reported in the USDA National Dairy Product Sales Report (NDPSR), price directions were mixed from the week ending 6 February to the week ending 6 March. Prices of 40-pound blocks and 500-pound barrels of Cheddar cheese fell to $1.6135 (-15.0 cents) and $1.4727 (-0.5 cents) per pound, respectively. Prices for butter and dry whey rose to $1.5078 (+16.2 cents) and $0.5311 per pound (+3.5 cents), respectively. The price of nonfat dry milk (NDM) fell 4.6 cents to $1.1032 per pound.

OCEANIA MARKET UPDATE
Australian and New Zealand are reaching the end of the milk of the production season. Milk productions were 1.04% and .77%, respectively, higher YoY for the month of January.

GDT
Post unprecedented jump on 2 March auctions, the GDT normalises its course, with WMP -6.2% and butter -2.8% prices brought down the GDT index 3.8% lower.

GLOBAL DAIRY COMMODITIES PRICES:
Indian dairy sector is more or less insulated from the global, but in our multiple studies, we have found Indian milk solids prices very closely follow global milk prices. To bring a better overview, we have developed a global milk price index in INR.


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