2022 is another year that will certainly go down in the history books for the dairy industry. Prices started to rise in mid- 2020 after the first covid lockdown and kept rising until they reached a record high level in Q2 2022. The rise in the market seemed unstoppable for a considerable time and as we have already explained in previous reports this was mainly due to pressures in the main exporting regions. Europe is the world’s largest dairy producing region accounting for 40% of all global exports. A mixture of labour shortages, profitability issues and government pressure on meeting environmental targets have all contributed to causing milk shortages in the main global dairy producing heartlands. Germany and France suffered the biggest contraction of milk supply in Europe over this period which affected the whole European milk output significantly as both countries combined account for 40% of the milk pool.
In this market report:
Global Dairy Outlook
The NZ region’s exports were down around 4% this year
European Milk Supply
Prices are tumbling at rapid speed
Irish Milk Prices
The major Irish dairies have maintained their milk price
Cheese Prices Fell
Since the start of November cheese prices have dropped significantly
Dairy Imports to China
The one potential saviour for the dairies and global milk prices is China
2022 was certainly a challenging year for everyone involved in the food industry with costs spiralling out of control and further disruptions to the supply chain. We had already seen similar disruption in 2021 but the global economy took a turn for the worse again with the outbreak of war in Europe not seen since 1945. As Ukraine is such a major producer of many key products for the food industry the economic pain was especially felt for many businesses that directly or indirectly import from there. The war also prompted a further spike in inflation not seen since the oil crises in the 1970’s. Inflation is still rampant and there are no signs of the rising global prices being halted in the near future. We face into a very uncertain time both economically and politically but we can be confident that if we have all survived the last 3 years we should be ok for the next 3 at least! We have all had to adapt to the changing landscape over the previous 3 years but it’s in times like these you really appreciate the robustness and innovation in successful businesses. Let’s hope for another prosperous year in 2023 despite all the headwinds we are facing into and we wish our customers and suppliers the best of luck in this New Year.