Has milk price seen its peak?
Milk prices will continue to strengthen and scale in the Q1-Q2 2022 at least. It is expected that a combination of factors like inflation, sluggish Chinese procurements, and price sensitive importers from developing markets in combination with increasing milk output of Northern hemisphere will soothe the milk price not before Q3.
Experts blame combination factors for the all-time highs in milk prices like scanty global milk production growth in the major export regions like AU and NZ due to lousy weather and robust import demand from China during 2021. Also, other market fundamentals such as shrinking milk production in the EU also support upward prices.
Where did the production fall?
Northern Hemisphere: The US and the EU saw a seasonal decline in milk production
Southern Hemisphere: Leading producers like AU, NZ, BR, UG and AR also saw a scanty start of the production season due to poor weather conditions.
BUTTERFAT & SOLIDS NON FATS (SNF)
Latest fortnightly market forward price assessment, dated Feb. 5th, shows an astonishingly jump for both Butter and SNF commodities over the next Mar-Jun period.
Size of this jump is avg. +4,3% and +5,5% respectively.
Next Feb 19th assessment will clarify whether markets hav e peaked or not.