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news

Tom Benson, Vice President Strategic Sourcing
May 1, 2013

Dairy markets increased significantly in April, led by Non Fat Dry Milk (NFDM) and Whole Milk Powder (WMP) sales on continued strong demand from Asia. The Global Dairy Trade auction (GDT) posted 30-40% price increases during the month causing a buying spree as many buyers rushed to cover short and budget positions. These strong numbers buoyed the rest of the complex, putting bullish pressure on WPC and Dry Whey markets. Although WPC prices only went up marginally in the last few weeks, prices are expected to go up by 10-15% before Q3. Overall, WPC 80 and WPI markets are steady with good demand matching new supplies.

Lactose markets also showed strength after prices softened in March. Continued strength in the infant formula markets has appeared to put a floor on lactose and whey permeate prices. Bird flu in China is a concern and can be a disruptor to traditional supply/demand models.

Milk production levels in Oceania are expected to be lower in the upcoming season due to drought conditions and wet conditions in the European complex, are adding to overall nervousness and price appreciation. The US will be expected to cover the growing global demand. Milk pricing in general looks to be bullish for Q3and Q4 while we see 2014 easing back at some point.