The Daily Dairy Digest: 21th of October

Yesterday was very active for us. The butter market was extraordinarily active and prices continued to ease down. We do see that sellers aren't as eager to chase the bids down to much lower levels. Although all indicators suggest that prices might go further down, sellers need a breathing period before markets can trade lower. 

At the same time, we see that liquids and futures continue to struggle to find a floor and here sellers keep going lower and lower. On top, we hear that the pressure for November and December sales is growing as end users are pushing back orders and export orders are being postponed until further notice. One of the people we spoke to on the SIAL was quite positive as their retail sales were doing quite well. But when they came back home after Paris multiple retailers started to postpone deliveries. High prices are impacting the demand. And as a famous market report maker keeps writing: "The best cure for high prices, is high prices." That saying seems to be proving itself right again.

We also saw the august milk production for the biggest world production regions. Milk collection in the world is still expected to be down about 0.5% but some regions are starting to show more growth than expected. The US milk production forecast is expected to be up for 2022 when a shrinking milk volume was forecasted last. More cows and more investments seem to lead to higher milk output. The high milk check is a boost for farmers to make the most of it!

But as someone, we spoke with at SIAL pointed out quite well. We have been focussing too much on milk production while losing our attention to the fast declining consumption. And production can recover quickly, but once people have developed a new eating/ buying habit, that is very hard to change again.