According to our latest Global Dairy Directions (GDD) outlook the gradual re-opening of foodservice outlets is within sight and will be a major influence on dairy markets in Q2 and beyond.
Meanwhile, European and Oceania markets continued to improve in February with limited milk expansion and good demand. Sustained strong Chinese buying in GDT events continued to push WMP and butter prices higher. It’s still within tolerance for Chinese buyers with a stronger RMB and given internal market dynamics. Demand elsewhere for WMP and fats remains patchy and price sensitive while SMP is more affordable with the spread of values on offer.
The EU market remains “cautiously firm” and spring weather (still forecast as “normal”) could easily alter that in Q2-2021. The glut of milk in the US will keep its markets weaker until cheese and butterfat demand turns, likely well before milk supply slows. Government programs for relief buying and farmer assistance will again influence market behaviour. Current EU and NZ commodity prices will meet resistance in most developing markets, while US exporters may get to use the advantage of cheaper protein, butterfat, and cheese prices to compete … when they can get product out of their ports.