EU Dairy and Butter Markets
Situation Fall 2010
Brussels, October 2010
Monika Wohlfarth
Zentrale Milchmarkt Berichterstattung GmbH
Tel. 030/4060799721 | [email protected]
Situation in Autumn 2010
− Milk deliveries in Western Europe recovered and are
increasing with remarkable growth rates
− Higher exports of cheese and SMP absorbed additional milk
volumes in the first half of the year
− Additional need in Russia because of drought, high import
demand in Asiademand in Asia
− Increased international prices, EU is competitive
− Consumption in EU stabilized
− Milk prices recovered to old levels
− Public stocks are reduced without pressure on prices (so far)
October 2010 | © ZMB Zentrale Milchmarkt Berichterstattung GmbH
Since May more milk in Europe…
1,2 % more from
April to August
11,5
12,0
12,5
13,0
EU-milk deliveriesMill. of tonnes
October 2010 | © ZMB Zentrale Milchmarkt Berichterstattung GmbH
9,0
9,5
10,0
10,5
11,0
Jan. Feb. März Apr. Mai Juni Juli Aug. Sept. Okt. Nov. Dez.
2008 2009 2010
Source: Eurostat, National Statistics.
© ZMB
Developments in milk deliveries mixed
Sweden ; -30
Italy; -37
Hungary; -64
Poland; -107
Development of milk deliveries in EU countriesApril to August 2010; changes in '000 tonnes
EU total: 0,7 Mill. tonnes more milk
October 2010 | © ZMB Zentrale Milchmarkt Berichterstattung GmbH
Germany; 237
France; 200
UK; 188
Ireland; 178
NL; 142
Denmark; 52
Belgium; 35
Austria; 32
Slowakia; -19
Czechia; -22
Higher milk prices and
Space in quotas stimulate
milk production in many
Countries, despite of rising
feed prices
Milk Output in exporting countries increasing
Latest T rends
USA August +2,7%
A ustralia July +3,2%
A rgentina July +11,1%
B razil June +14,9%
B elarus August -2,9%
Ukraine August -4,9%
Milk Output in different countries
000 t January - 2009 2010 10:09 *
EU-27 August 93.207 93.518 + 0,3%
Switzerland July 2.043 2.060 + 0,8%
Croatia July 410 382 - 7,0%
Belarus 1)
August 4.671 4.700 + 0,6%
Russia 1) April 8.874 8.937 + 0,7%
Ukraine 1) August 8.159 7.872 - 3,5%
October 2010 | © ZMB Zentrale Milchmarkt Berichterstattung GmbH
Canada June 3.940 3.964 + 0,6%
USA 1) August 58.069 58.846 + 1,3%
Mexico August 7.310 7.353 + 0,6%
Argentina 2)August 4.271 4.181 - 2,1%
Brazil June 9.504 10.448 + 9,9%
Chile July 1.094 1.173 +7,2%
Japan July 4.698 4.627 - 1,5%
Australia 1) July 4.709 4.696 - 0,3%
New Zealand June 2008 to May 2009 16.500 16.800 +1,8%1) Milk production 2) Milk Deliveries of 20 dairies, representing
64 % of milk deliveries. © ZMB Sources: ZMB, national statistics.
More Milk traded in 2009, NZ gained Share
13,3
11,9
12,9
13,6
13,0
NZ
EU
Exports of Dairy Products to international MarketsMillions of Tonnes MEQ's
October 2010 | © ZMB Zentrale Milchmarkt Berichterstattung GmbH
4,1
4,4
16,4
6,0
3,8
11,9
4,7
4,2
USA
AUS
NZ
2007 2008 2009
Source: Own calculations based on national statistics.. © ZMB
World Trade in Dairy Products increased further, but Butter Trade reduced
Cheese
Whole milk powder
2010
2009
Trade in Dairy Productsin tons
October 2010 | © ZMB Zentrale Milchmarkt Berichterstattung GmbH
0 200.000 400.000 600.000 800.000 1.000.000
Whey powder
Butter
Skim milk powder
2009
© ZMB
January - June/July
Data preliminary: Total
amount of exports of the
biggest exporters
Strong EU-Exports in the first half of 2010
317291
377
276
2009 2010
EU-27: Exports of Dairy Products
('ooo Tons, January-July)
October 2010 | © ZMB Zentrale Milchmarkt Berichterstattung GmbH
90114
134
220
18
87
276
213
136
217
20
Butter* Cheese WMP SMP Condensed Wheyp. Casein
*Butteroil incl. Source: Eurostat© ZMB
Less dairy products imported
46,045,12009
2010
EU-27: Imports of Dairy Products
('000 tons, January-Julyincluding inward processing)
October 2010 | © ZMB Zentrale Milchmarkt Berichterstattung GmbH
23,6
0,13,6
1,8
20,821,8
1,5 2,1 2,6
16,8
Butter Cheese WMP SMP Whey Powder
Casein
© ZMB*incl. Butteroil
EU-Butter production is recovering
150
170
190
EU-27: Butterproduction '000 tonnes
2010
2008
From July 2009 to June
2010 production was
reduced by 107,000 tons
October 2010 | © ZMB Zentrale Milchmarkt Berichterstattung GmbH
110
130
150
Jan. 05 Apr. 05 Jul. 05 Okt. 05
2009
2010
© ZMB
Since May more Milk Fat delivered
46000
48000
50000
2008
2009
2010
EU: Production of milk fat'000 tonnes
October 2010 | © ZMB Zentrale Milchmarkt Berichterstattung GmbH
38000
40000
42000
44000
Jan. Feb. März April Mai Juni Juli Aug. Sept. Okt. Nov. Dez.
Quelle: Eurostat, nationale Statistiken.© ZMB
More milk(fat) used for cheese
EU-Production of Dairy ProductsJanuary to July July
000 t 2009 2010* 10:09 * 10:09*
Liquid milk 19.369 19.456 + 0,4% - 0,0%
Cream 1.380 1.384 + 0,2% - 3,7%
Fermented Products 5.123 5.257 + 2,6% + 2,5%
Butter 1.152 1.096 - 4,8% - 4,1%
October 2010 | © ZMB Zentrale Milchmarkt Berichterstattung GmbH
Butter 1.152 1.096 - 4,8% - 4,1%
Cheese 4.818 4.893 + 1,6% + 1,0%
WMP etc. 482 469 - 2,6% - 3,4%
SMP 717 655 - 8,6% - 15,9%Condensed milk 638 603 - 5,5% + 0,1%*) Provisional.
Sources: ZMB, Eurostat, national statistics. © ZMB
Butter production reduced nearly everywhere,
so far …
EU Butter Production July
000 t 2009 2010* 10:09 ** 10:09*
Czech Rep. 21,0 15,8 - 24,9% - 26,2%
Denmark 24,0 21,4 - 10,8% - 25,0%
Germany 282,2 270,5 - 4,1% - 6,7%
Spain 23,8 22,9 - 3,8% + 28,6%
France 260,2 249,8 - 4,0% - 2,4%
Ireland 80,5 79,9 - 0,8% + 10,3%
Italy 54,7 55,4 + 1,2% + 3,1%
January to July
October 2010 | © ZMB Zentrale Milchmarkt Berichterstattung GmbH
Lithuania 10,1 5,9 - 42,0% .
Netherlands 83,0 81,0 - 2,4% + 6,0%
Austria 19,8 19,9 + 0,4% - 5,8%
Poland 99,4 94,8 - 4,6% + 3,9%
Portugal 18,3 16,2 - 11,5% - 49,5%
Slovakia 5,0 4,4 - 13,0% + 2,1%
Finland 33,7 31,9 - 5,2% - 10,4%
Sweden 18,9 14,4 - 23,7% - 7,6%
United Kingdom 76,0 73,3 - 3,6% + 3,2%
EU-27 1.152 1.096 -4,8% -4,1%
*) Provisional.
Sources: ZMB, Eurostat, national statistics. © ZMB
… outside EU, too
Butterproduction
Period 2009 2010 ± % Vj.
EU-27 Jan. - July 1.152 1.096 - 4,8%
USA Jan. -Aug. 496 470 - 5,3%
Canada Jan. - June 48 45 - 6,3%
Australia Jan. - June 56 49 - 12,2%
October 2010 | © ZMB Zentrale Milchmarkt Berichterstattung GmbH
Australia Jan. - June 56 49 - 12,2%
Japan Jan. - July 51 50 - 0,9%
Ukraine Jan. -Aug. 54 54 + 0,4%
Switzerland Jan. - July 31 32 + 1,8%
Total Amount 1.887 1.796 -4,8%
Source: ZMB, national statistics.
Different Butter prices
Germany (Hannover) Netherlands
2,00
2,50
3,00
3,50
4,00
J F M A M J J A S O N D
20092008
E/kg
2,00
2,50
3,00
3,50
4,00
J F M A M J J A S O N D
20092008
E/kg
2010 2010
October 2010 | © ZMB Zentrale Milchmarkt Berichterstattung GmbH
France (Paris) Italy (Milano)
2,05
2,55
3,05
3,55
4,05
J F M A M J J A S O N D
2009
2008
E/kg E/kg
2,00
2,50
3,00
3,50
4,00
J F M A M J J A S O N D
2009
2008
20102010
Different Butter prices (II)
United Kingdom (London) USA (Chicago)$/t£/t
1600
2150
2700
3250
3800
J F M A M J J A S O N D
2009
2008
2000
2750
3500
4250
5000
J F M A M J J A S O N D
2009
2008
20102010
October 2010 | © ZMB Zentrale Milchmarkt Berichterstattung GmbH
World Market World Market
J F M A M J J A S O N D
US-$/t E/kgE/kg
1700
2500
3300
4100
4900
J F M A M J J A S O N D
2009
2008
1,30
1,90
2,50
3,10
3,70
J F M A M J J A S O N D
2009
2008
20102010
Butter prices surged
4,00
4,50
Butter Prices
bulk, Hannover
EUR/kg
October 2010 | © ZMB Zentrale Milchmarkt Berichterstattung GmbH
2,00
2,50
3,00
3,50
Jan 02 Jan 03 Jan 04 Jan 05 Jan 06 Jan 07 Jan 08 Jan 09 Jan 10
Intervention price
Hannover
High Butterprices at international Market
compared with milk powder
3.500
4.000
4.500
5.000
5.500
International Dairy Prices
US-$/tSMP
VWMP
October 2010 | © ZMB Zentrale Milchmarkt Berichterstattung GmbH
500
1.000
1.500
2.000
2.500
3.000
3.500
Jan 94 Jan 96 Jan 98 Jan 00 Jan 02 Jan 04 Jan 06 Jan 08 Jan 10
Butter
© ZMB
International Prices are higher than ever before
4.000
5.000
6.000
7.000
Butter PricesUSD/ton
EU
October 2010 | © ZMB Zentrale Milchmarkt Berichterstattung GmbH
0
1.000
2.000
3.000
4.000
Jan 03
Jul Jan 04
Jul Jan 05
Jul Jan 06
Jul Jan 07
Jul Jan 08
Jul Jan 09
Jul Jan 10
Jul
EU
World Market© ZMB
Butter exports since April weak
12.000
14.000
16.000
18.000
EU: Exports of Butter and Butteroil to Third Countries*in tons
October 2010 | © ZMB Zentrale Milchmarkt Berichterstattung GmbH
0
2.000
4.000
6.000
8.000
10.000
Jan. Feb. Mar. April May June July Aug. Sept. Oct. Nov. Dec.
2008 2009 2010
* in product weight
Only USA and Brazil exported more
Exports of Butter and Butteroil
tonns 2009 2010 ± %
EU-27 Jan. - Jul. 90.240 87.340 - 3,2
New Zealand Jan. - Jul. 285.709 238.158 - 16,6
Australia Jan. - Jul. 50.030 42.440 - 15,2
USA Jan. - Jul. 11.626 34.138 + 193,6
Switzerland Jan. - Jul. 2.779 2.640 - 5,0
October 2010 | © ZMB Zentrale Milchmarkt Berichterstattung GmbH
Switzerland Jan. - Jul. 2.779 2.640 - 5,0
Argentina Jan. - Jun. 7.667 5.139 - 33,0
Brasilia Jan. - Jun. 1.963 2.059 + 4,9
Total amount 450.014 411.915 - 8,5
Sources: ZMB, EU-Comm., GTA, national statistics
Prices of vegetable oil are increasing, but they
are lower than Butter prices
1200
1400
1600
1800
Coconut Oil Prices(Philippines, cif Rotterdam)
2007
2008
US$/Tons
October 2010 | © ZMB Zentrale Milchmarkt Berichterstattung GmbH
200
400
600
800
1000
Jan March May July Sept Nov
2009
Source: FAO, Oilworld
2010
Less Butter in PSA than in 2008 and 2009
100
120
140
160
2008 2009 2010
EU: Private Storage of Butter
(Stocks at the end of month, '000 tons)
October 2010 | © ZMB Zentrale Milchmarkt Berichterstattung GmbH
0
20
40
60
80
Jan. Feb Mrz Apr Mai Jun Jul Aug Sep Okt Nov Dez
..but supplies replenished by intervention stocks
262,5
197,0
EU: Intervention Stocks Beginning of October ('000 t)
2008 2009 2010
October 2010 | © ZMB Zentrale Milchmarkt Berichterstattung GmbH
0,0
141,6
0,0
77,2 83,3
1,5
73,9
Butter, public Butter, private Skim Milk Powder
Source: ZMB, European Commission.
Private Butter consumption decreased again
German: Household purchases (GfK)
Jan Feb Mrz Apr Mai Jun Jul Aug Sep Okt Nov Dez Jan - Aug
Butter
1.000 t
2008 22,7 19,0 22,5 22,3 22,7 21,3 18,7 20,2 20,4 25,1 27,2 29,0 169,4
- 14,0
+ 2,8 + 2,1
- 0,6 - 1,0
- 7,6 - 7,4- 3,0 - 3,6
October 2010 | © ZMB Zentrale Milchmarkt Berichterstattung GmbH
2008 22,7 19,0 22,5 22,3 22,7 21,3 18,7 20,2 20,4 25,1 27,2 29,0 169,4
2009 23,4 20,6 22,7 23,8 22,7 20,8 21,4 20,5 22,1 27,1 25,0 27,9 175,8
2010 20,2 21,2 23,1 23,7 22,4 19,2 19,8 19,9 169,5
±%Vj. - 14,0 + 2,8 + 2,1 - 0,6 - 1,0 - 7,6 - 7,4 - 3,0 - 3,6
Butter Market balanced in the second half of
2010
EU Butter Balance Sheet
'000 t 2006 2007 2007 2008* 2009* 2010**
EU 25 EU 25 EU 27 EU 27 EU 27 EU 27
Initial stocks 164 110 110 100 150 145
Total production 2.080 2.100 2.110 2.090 2.050 2.010
- on farms 20 20 20 20 20 20
Imports 82 85 85 65 62 45
Exports 248 220 211 147 143 140Final stocks 110 90 100 150 145 85
October 2010 | © ZMB Zentrale Milchmarkt Berichterstattung GmbH
thereof public stocks 64 0 0 0 79 2
Disappearance 1.968 1.985 1.994 1.958 1.974 1.975
- at market prices 1.493 1.831 1.840 1.958 1.974 1.975
- "subsidised"1)475 154 154 0 0 0
Per capita (kg) 4,3 4,3 4,0 3,9 3,9 3,9*)Provisional **) Forecast. Updated September 2010
1) Until April 2007 subsidised markets. Including direct-butteroil. Subsidised cream not included.
Further prospects for the butter market
− EU-Production will increase slightly until the end of
2010
− International supplies will be limited, but high
prices are dampening demand
− Demand in EU suffer from high prices, but to lesser − Demand in EU suffer from high prices, but to lesser
extend than 2007
− EU-butter-market is likely to be in balance until the
end of the year
− If the cheese market will grow further in 2011 no
oversupply of butter is expected
October 2010 | © ZMB Zentrale Milchmarkt Berichterstattung GmbH
More Cheese produced and exported
EU Cheese Balance Sheet
'000 t 2006 2007 2007 2008* 2009** 2010**
EU 25 EU 25 EU 27 EU 27 EU 27 EU 27
Production 8.695 8.811 8.978 9.035 9.030 9.160- from cows' milk in dairies 7.965 8.082 8.217 8.285 8.280 8.420
- on farms 90 85 100 100 100 100
- from other milk 630 644 661 650 650 640
Imports 108 105 94 89 84 80
October 2010 | © ZMB Zentrale Milchmarkt Berichterstattung GmbH
Imports 108 105 94 89 84 80
Processing addition1)263 260 265 255 250 250
Available 9.065 9.176 9.337 9.379 9.364 9.490
Exports 584 610 594 555 576 640Stock Change -10 20 20 10 -30 0
Consumption 8.491 8.546 8.723 8.814 8.818 8.850
- per capita (kg) 18,3 18,3 17,6 17,7 17,7 17,7
*)Provisional **) Forecast. Updated September 2010
Cheese prices recovered
3,60
4,00
4,40
Euro/kg Germany: Semi Hard Cheese Block, Gouda, 48 %, Edamer 40 %
Average invoice price
October 2010 | © ZMB Zentrale Milchmarkt Berichterstattung GmbH
2,00
2,40
2,80
3,20
412007
4651 6 111621263136414651 7 121722273237424752 6 111621263136
Average invoice price
daily price
2008 2009 2010
Substantial SMP-Stocks will remain
EU SMP Balance Sheet
'000 t 2006 2007 2007 2008* 2009* 2010**
EU 25 EU 25 EU 27 EU 27 EU 27 EU 27
Opening stocks 74 94 95 128 220 319
Production 1.036 1085 1090 1040 1.100 1.050
Imports 19 9,7 5,5 5,8 6 10
Available 1.129 1188,7 1190,5 1173,8 1.326 1.379
Consumption 950 860 870 775 780 790
October 2010 | © ZMB Zentrale Milchmarkt Berichterstattung GmbH
Consumption 950 860 870 775 780 790
- other than feed 600 620 625 625 620 620
- in feed 350 240 245 150 160 170
Exports 84 200 199,4 179 227 320
Ending stocks 95 128 121 220 319 269
- in intervention 0 0 0 0 260 180
*)Provisional **) Forecast. Updated September 2010
SMP-Prices higher than intervention
3.000
3.500
4.000
EUR/t© ZMP 2009
Quotation, food quality
SMP Prices
October 2010 | © ZMB Zentrale Milchmarkt Berichterstattung GmbH
1.500
2.000
2.500
3.000
Jan 03
Juli Jan 04
Juli Jan 05
Juli Jan 06
Juli Jan 07
Juli Jan 08
Juli Jan 09
Jul 09
Jan 10
Juli
Intervention Purchase Price
WMP-Export not easy
EU Balance Sheet of Whole Milk Powder
'000 t 2006 2007 2007 2008* 2009* 2010**
EU 25 EU 25 EU 27 EU 27 EU 27 EU 27
Production 790 770 775 878 768 780
Imports 2 2 2 2 2 2
October 2010 | © ZMB Zentrale Milchmarkt Berichterstattung GmbH
Imports 2 2 2 2 2 2
Exports 423 362 362 481 451 420
Change in stocks 0 30 30 20 -55 0
Sales 369 381 385 379 374 362
*)Provisional **) Forecast. Updated September 2010
EU-Prices of WMP increased
3.000
3.500
4.000
4.500
EUR/t
EU
WMP Prices
October 2010 | © ZMB Zentrale Milchmarkt Berichterstattung GmbH
1.000
1.500
2.000
2.500
Jan 01
Jan 02
Jan 03
Jan 04
Jan 05
Jan 06
Jan 07
Jan 08
Jan 09
Jan 10
World Market
EU
© ZMB
Milk prices higher than 30 Eurocent again
Milk prices - Germany Milk prices - France
EUR/100 kg EUR/100 kg
20
25
30
35
40
J F M A M J J A S O N D
2008
2009
2010
20
25
30
35
40
J F M A M J J A S O N D
2008
2009
2010
October 2010 | © ZMB Zentrale Milchmarkt Berichterstattung GmbH
Milk prices - Poland Milk prices - USA
EUR/100 kgEUR/100 kg
15
20
25
30
35
J F M A M J J A S O N D
2008
2009
2010
15
20
25
30
35
J F M A M J J A S O N D
2008
20092010
34
38
Support by Intervention and Average Farm Milk Price
(3.7 % fat, Germany)
Farm milk price Germany
Euro/100 kg
Forecast 2010
The milk price crises is over
September 2010 | © ZMB Zentrale Milchmarkt Berichterstattung GmbH
18
22
26
30
1968 1980 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009
Support by Intervention
Prices increase
Contraction of demand, Increase of Production
Reducing of stocks
The „Milk Price Cycle“ – how to manage
volatility
Stocks built up
Prices fall
Demand increases
faster than production
September 2010 | © ZMB Zentrale Milchmarkt Berichterstattung GmbH
Very slow interest in Eurex-Futures
Eurex - FBUTEUR/ton
4
5
6
3700
4000
July/October-Contract
contractsEurex - FSMP
EUR/ton
4
5
6
2400
2600
contracts
July/October-Contracts
September 2010 | © ZMB Zentrale Milchmarkt Berichterstattung GmbH
© ZMB
0
1
2
3
2800
3100
3400
31.5 14.6 28.6 12.7 26.7 9.8 23.8 6.9
Open Interst Contracts Prices
July/October-Contract
0
1
2
3
1800
2000
2200
31.5 14.6 28.6 12.7 26.7 9.8 23.8 6.9
Open Interst Contracts Prices
Further prospects
− More milk in the second half of 2010 expected,
increasing milk prices stimulate production
− More milk will go in cheese, only a slight recovery of
production of Butter and SMP expected
− Strong production in other export regions− Strong production in other export regions
− Exports will absorb the additional volumes, unexpected
needs in Russia, robust demand in Asia
− How long will the market stay in the upper side of the
cycle?
September 2010 | © ZMB Zentrale Milchmarkt Berichterstattung GmbH
Thank you
for your attention!
Monika Wohlfarth, CEO
ZMB Zentrale Milchmarkt Berichterstattung GmbH
www.milk.de
October 2010 | © ZMB Zentrale Milchmarkt Berichterstattung GmbH