Milk prices are skyrocketing on expectations that a tight market will be hit by further disruption in fertilizer and feed supplies and inflationary pressures following the Russian invasion of Ukraine.
Bad weather in New Zealand, the US and Australia, combined with skyrocketing gas prices and pandemic-related supply chain disruptions, had put pressure on the milk producers of the top five exporters before the war.
Combined milk production in New Zealand – known as the “Saudi Arabia of milk” because it controls 35 percent of global exports – the EU, Australia, the US and Argentina fell 1.7 percent in January compared to the previous year. commodity broker StoneX.
The milk production of the five producers fell year over year, with New Zealand and Australia posting a drop of more than 6 percent.
After the outbreak of war on February 24, the prices of crucial products rose further. Anhydrous milk fat, a core dairy product, hit a record $7,111 per tonne on March 15, according to the Global Dairy Trade Index, which tracks New Zealand dairy prices. Whole milk powder, the most actively traded product, reached an eight-year high this month.
New Zealand company Fonterra, the world’s largest dairy exporter, said last week it was paying farmers 30 percent more for milk than a year ago and predicted the price would rise further.
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was original published at “https://www.ft.com/content/4fe601c9-25e2-48e5-a668-d4fcb34d3afc”