Milk Shortages

milk shortage

milk shortageWe are already seeing signs of the effect of milk shortages with price increases being reported on most cheese products in February. Milk volumes are very weak on the continent with German and French processors reporting reduced intakes.

The cold weather across Europe is hampering usual milk volumes. New Zealand are also exiting from their peak summer season at 75% of their usual volume. Prices have therefore strengthened as the major players are struggling with milk supply while at the same time a resurgent China has picked up it’s taste for dairy again. China’s dairy imports grew by 11% in 2020 and with a population of their size a pick up this big is very significant indeed for the supply-demand fundamentals. The political situation has also changed in USA with the new Biden presidency and this may reverse the damaging tariffs imposed by the Trump administration on EU dairy products. If European sales pick up again in America due to the abolition of tariffs this may put further pressure on prices later in the year.

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