Milk Price Forecast 2019
This article is for interest only and is not to be relied upon. 2019 is looking very much the same as 2018 with no major improvement in milk prices on the horizon. The Europeam milk flush is fast approaching giving a potential for a dip in prices taking into account a number of factors. The dairy hunting cycle indicates that 2019 should see an upswing in prices. See 2018 article here with hunting cycle graph. Has sufficient changed to stabilise prices?. If sufficient has been done then the implication is that there may not be a major upswing in prices in 2019 as predicted by the hunting cycle. (which we all want to stabilise). The EU tends to release more powder for sale as market prices increase and this has a dampening effect on global prices. Coming into Feb 2019 the indications are that Intervention stocks of Skimmed Milk Powder are now mostly sold and going forward this should help in maintaining prices by not offering large volumes of discounted product on to the global market. The latest GDT prices show an upswing but this may be due to optimising volumes offered for sale vs known historical / projected demand. Their platform assists in stabilizing global markets for dairy products and safeguard interests of farmers to manufacturers, shareholders, investors and consumers by not flooding the market. Is there a conflict of interest with various interests compiling information in order to maximise their own returns?. Should there be a Milk price stability fund in place to have an independent global perspective as suggested here in 2018? > Link 2018 US exports to the rest of the world were up at record levels and accounted for 16% of milk production. ref USDA. Loss of sales to China—America’s third-largest single-country market—followed mid-year retaliatory tariffs, playing a role in the year-end decline. U.S. sales to China were up 17 percent in the first half of the year but fell 33 percent in the second half—a drop of more than 10,400 tons of product per month. Exports to Southeast Asia also faded toward year-end, sliding 18 percent in November-December, while shipments to Japan were down 10 percent throughout the second half. Mexico and Southeast Asia remained the top two overseas destinations for U.S. dairy products in 2018, accounting for 39 percent of total export value. Canada, China and South Korea rounded out the top five markets. Among other markets, U.S. suppliers posted increased sales last year to the Middle East/North Africa (MENA) region and the Caribbean. U.S. exports of NDM/SMP totalled 715,491 tons in 2018, up 18 percent from the prior year, as U.S. suppliers took advantage of strong, broad-based global import demand. Sales to Mexico (up 25 percent, +70,761 tons, to 348,989 tons) reached a record high, and shipments to Southeast Asia (up 32 percent, +52,449 tons, to 216,077 tons) were the most ever as well, despite falling 25-percent short in the last two months of the year. These two markets accounted for more than three-quarters of U.S. NDM/SMP export volume. The Philippines remained the top market in Southeast Asia, and shipments to Indonesia and Vietnam increased 70 percent. In contrast, other key markets suffered losses: exports to China, Peru, Pakistan, Japan and the MENA region were just 70,561 tons in 2018, down 29 percent (-28,820 tons). The graph below highlights some significant incidents which affected the milk price. The dairy industry would benefit from a better structured, detailed ongoing study over the long term. See the full article here: https://www.linkedin.com/pulse/milk-price-crystal-ball-2019-john-watson/