Dairy poised for export gains
Despite all the challenges facing dairy last year, 2020 was a good year for U.S. dairy exports. And there’s reason for continued growth now and in the future, as the United States is well-positioned to be competitive in key markets.
Exports are increasingly important in dairy trade – globally and in the United States.
Global milk solids exports in 2019 totaled 9.400 million metric tons (MT); in 2020, they had grown nearly 400 million MT, to 9.793 million MT. The United States captured a sizeable portion of that trade, with total U.S. exports reaching over 2 million MT and growing 12% over 2019.
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Dairygold chief executive Jim Woulfe (left) and newly elected chair John O’Gorman in Cork. \ Daragh Mc Sweeney/Provision
The board of Dairygold Co-op has announced a price increase of 0.5c/l, which it says brings its base price to 32.7c/l, excluding VAT, at 3.3% protein and 3.6% fat for March milk supplies including bonuses.
In addition to this, Dairygold pays a March early calving bonus of 1.0c/l, which will be paid on milk supplied in March.
Carbery also increased its milk price by 1c/l, so the individual co-ops that supply Carbery (Lisavaird, Bandon, Barryroe and Drinagh) are all meeting and will presumably increase milk price by 1c/l also.
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After a negative auction in late March, the first GDT event of April got back on track with price increases across key commodities.
The first GDT event for April recorded a small increase of 0.3% which brings the index to US $4,081/t and on par with levels last seen in spring 2014.
Twelve out of the last 14 GDT events have now recorded a positive outcome, which bodes well for dairy markets through the spring flush.
Butter rose by 2%, with cheddar up 2.2%. Skim milk powder rose by 0.6% ,with whole milk powder unchanged.
Meanwhile, DAERA statistics show that farmgate milk prices averaged 29.3p/l during January, up 2.38p/l on the same month last year.
Milk powder prices in New Zealand are at their highest level since 2014.
The four-month-long winning run of the GDT index finally came to an end this week, after the benchmark dairy auction recorded a near 4% decline in average dairy prices.
This week’s dip in average dairy prices comes as no surprise following the GDT’s recent bull run, particularly for milk powder prices.
However, the GDT index remains in very strong territory and is at its highest level since 2014 – a good omen for milk prices this year.
The fall in dairy prices at this week’s auction was led by a 6% drop in the average price of whole milk powder (WMP) to just over $4,000/t (€3,430/t). The retreat in WMP prices this week is no surprise, following the 21% spike in WMP prices at the last GDT auction.