Q2 2022 Milk Value Portal Dairy Market Insights now available

The second-quarter Dairy Market Insights report (June 2022) is now available on the Milk Value Portal (MVP). This report highlights the variables impacting market fundamentals in the short to medium term, from the tightening global milk supply and rising inflation, to the ongoing uncertainty in trade markets.

Key insights include:

  • Internationally: global dairy markets are at a tipping point, with milk supply still constrained, but demand affected by rising inflation and wider economic uncertainty.
  • Farmgate prices have increased in most milk producing regions but have not prompted a significant supply response due to rising input costs, unfavourable weather, and policy constraints.
  • Consumer sentiment has weakened as inflation reaches more consumers around the world. Confidence has plummeted in the United States, where it is already impacting dairy spending, while the mood in the European Union is quickly darkening.
  • Locally: spot dairy commodity prices have fallen over the June quarter, but the impact on local returns has been cushioned by a significant fall in the Australian dollar. The Commodity Milk Value (CMV), recalculated for 2021/22 to account for spiralling energy and fuel costs, has fallen 3% since the end of March, to $9.54kgMS (end June).
  • Despite the easing in commodity prices, 2022/23 opening farmgate prices have climbed since 1 June as processors compete for dwindling milk supplies.
  • Milk prices offered in Southern regions for the 2022/23 season are currently averaging $9.55kgMS, more than $2kgMS above the 2021/22 season.
  • The ability to pass on full input cost increases in retail, foodservice and industrial markets will be critical but challenging in the face of broad-based inflation.

To access the latest Dairy Market Insights report please click here.

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