The milk supply is still very unstable all over the world, and there are many reasons for this. Since the beginning of the year, prices have only gone up.
Europe and UK
In the economy after Covid, inflation was already very high, and the war in Ukraine has made the pressures on farmers all over Europe even worse. France, Germany, Benelux, and southern Europe, which are some of the biggest producing areas in the EU, were hit the hardest, while Poland, Ireland, and Denmark were mostly unaffected.In the UK, the price of fertiliser has gone up from £315 per tonne to £930 per tonne (€366 per tonne to €1,081 per tonne). Paul Tompkins, vice chair of the National Union of Farmers dairy board in the UK, says that diesel prices have doubled, from £0.63 per litre to £1.29 (€0.73 to €1.50), which has made fertiliser more expensive.
The European Milk Board says that in Portugal, the price of diesel has gone up by 62%, the price of maize has gone up by 77%, and the price of nitrogen fertilisers has gone up by 140%. In France, the cost of energy has gone up by 30% and the cost of fertiliser has gone up by more than 80% in the last year.
The US
An interesting side effect of what’s going on in Europe is that big European dairy traders from places like the Netherlands are looking to the US to import cheese because it’s cheaper there.
Seasonally, milk production is going up in the Midwest of the US, which some cheesemakers say will make more cheese available in the coming weeks. Cheesemakers say that retail cheddar and Italian-style cheese are in high demand, and that Asian buyers are buying a lot of it to ship in the second quarter of 2023.
Latin America
After prices hit all-time highs in August, they went down in September. But demand is getting stronger, which will probably stop prices from going down even more. In recent months, producers have been able to handle increases in operating costs thanks to higher prices.
In the first half of 2022, the amount of milk made in Latin America went up by 3.3% compared to the same time last year. This increase is partly due to the fact that the weather has been good, which has helped countries that were affected by drought to get back into growth. Milk prices have also gone up, which has helped this increase in volume.
Since Brazil is making more on its own, there is a lot less demand for imports. This has made it easier to send goods to places like Algeria and China in the past few months.
