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Dairy Market Review - Emerging trends and outlook, December 2020









​FAO. 2020. Dairy Market Review: Emerging trends and outlook, December 2020. Rome. 


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    Journal, magazine, bulletin
    Dairy Market Review - Overview of global dairy market developments in 2019 2020
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    This publication provides an update on production, trade and price movements of milk, and milk products (butter, cheese, skim milk powder and whole milk powder). It aims to provide a clear snapshot view of key changes and underlying determinants of world dairy markets. It is the only publication that covers dairy market developments in the entire world that is also updated regularly; it supports the division’s objective in providing market information relevant for policy makers, helping them in the process to take data-based policy decisions. • Average dairy prices rebounded in 2019 following a fall in 2018. • Skim milk powder (SMP) prices rose the most, followed by cheese and whole milk powder (WMP), but butter prices declined. • Global milk production expanded, led by Asia, but Oceania’s output fell slightly. • Global dairy exports (milk equivalents) expanded, albeit moderately, with sustained growth in Europe and Oceania. Across dairy products, shipments of cheese, WMP and butter rose the most, but SMP sales declined.
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    Dairy market review - Price and policy update, July 2021 2021
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    International dairy prices, measured by the FAO Dairy Price Index, fell slightly in June, ending 12-month of uninterrupted increases. At 119.9 points in June, the global dairy price index stood at 22 percent above its level one year ago. International quotations for all dairy products represented in the index fell in June, with butter registering the highest decline, underpinned by a faster decline in global import demand and a slight increase in inventories, especially in Europe. Whole milk powder prices declined on reduced purchases by China and lower demand for spot supplies, while global export availabilities remained adequate to meet existing orders. Quotations for cheese and skim milk powder weakened slightly also on reduced global import demand amid somewhat higher export supplies from major producing regions.
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    Dairy Market Review - Overview of global dairy market developments in 2018
    mrt/19
    2019
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    Global milk output in 2018 is estimated at 842 million tonnes, an increase of 2.2 percent from 2017, driven by production expansions in India, Turkey, the EU, Pakistan, the United States and Argentina, but partially offset by declines in China and Ukraine, among few others. This increase has come about as a result of higher dairy herd numbers along with improvements to milk collection processes (India and Pakistan), efficiency improvements in integrated dairy production systems (Turkey), increased yield per cow (the EU and the United States) and enhanced utilization of idle capacity and higher demand from the processing sector and imports (Argentina). Milk output declines largely stemmed from industrial restructuring processes and downscaling of small-scale farms (China) and reduced producer margins and farm gate prices (Ukraine). Across the regions, Asia registered the highest milk output expansion by volume in 2018, followed Europe, North America. Milk output expanded in all other regions too, but by smaller volumes. World exports of dairy products expanded to 75 million tonnes (in milk equivalents), an increase of 2.1 million tonnes, or 2.9 percent from 2017, principally coming from the United States and Argentina, but also India, Uruguay, and Mexico. By contrast, exports declined in a number of countries, in particular in the Islamic Republic of Iran. Across the main dairy products, in 2018, SMP registered the highest export expansion (+8.6 percent), followed by butter (+7.5 percent), WMP (+1.7 percent) and cheese (+0.8 percent). As for milk powders, consisting of SMP and WMP, export availabilities were abundant from almost all major international suppliers. Large stocks of SMP, held by the EU, the United States and India, also contributed to elevate global supply availabilities. EU SMP stocks, given their age, were mostly considered less suitable for human consumption. In addition to immediate human consumption in the form of milk, powders were also in high demand from food processors and manufacturers, boosting import demand from some countries such as Mexico. Although butter exports for the whole year expanded, supplies were relatively limited in the first six months. Global supplies rose only when supplies from Oceania began entering the global markets, starting from about July, when its milk production season was in full swing. Butter import demand nevertheless was robust, especially from Asia, as urbanization, rising income and changing food habits made butter demand less price sensitive. Cheese exports expanded at a slower pace in 2018, compared to that of 2017, reflecting import cutbacks of many importers, including Australia and the United States. A robust market, however, existed for high value cheese products, boosted by rising consumer demand for specialized cheese varieties, also with geographic labelling. International dairy prices in 2018, measured by the FAO Dairy Price Index, declined by 4.6 percent compared to that of 2017, reflecting declines in prices of all dairy products represented in the Index, with the highest fall registered for SMP (-5.6 percent), followed by cheese (-5.2 percent), butter (- 4.4 percent) and WMP (-2.9 percent). The global supply-demand balances of each commodity, induced by factors discussed above, are compatible with these price movements. An additional factor that is noteworthy of mentioning on international dairy prices was the significant differentials that existed between the EU and Oceania on butter, WMP and SMP prices. Prices for butter and WMP in the EU hovered at higher levels than for Oceania, and that prices of SMP from Oceania were higher than those from the EU. Market segmentation, associated consumer preferences, reflecting geographical proximity to markets, was thought to be behind the observed price differentials across the two regions.

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