Tom Benson, Vice President Strategic Sourcing
June 1, 2013
World Dairy Markets are volatile due to continuing reports that New Zealands Milk numbers are down even more than previously expected. Latest milk production reports are that April and March were down double digits vs last year. These low numbers put World Production down almost 2% vs last year. Strong demand in NFDM and Whole Milk Powders will also decrease production levels of Cheese and Whey Products in Oceania putting future pressure on these markets. Higher Protein milk powder prices are going up significantly and we see this continuing through 2013
Sweet Whey powder prices have decreased slightly while WPC 34 markets have gained strength. Overall, WPC 80 and WPI prices have decreased slightly due primarily to new production in the market but demand from end users continues to grow. Again, due to the significant production decline in Oceania we see that while we may see softer prices in Q3 we will see higher market prices in Q4 and 2014.
Lactose prices have stopped going down and the milk situation in Oceania has the market speculating that prices will now start to rise as demand continues to grow.