However, according to Dustin Boughton, procurement director at Maxum Foods, the US and UK are well into programs hopefully leading to a steady reopening of the foodservice trade in the coming months.
Boughton said Europe has lost control of infections and a slow vaccine rollout has forced extended but uneven restrictions on movement. Meanwhile, major logistics delays have slowed trade from major US and EU ports.
Weather is also varied, as the La Nina effect weakens after delivering a cool, wet summer to create great seasonal conditions in southern Australia. Boughton said cold weather in the EU will ensure a slow start to spring, while drought creeps further across the west of the US. Volatile late-season conditions across NZ have brought a late-season lift in milk output, but that can quickly change.
Boughton said strong Oceania prices - driven up by China’s dominance of the Global Dairy Trade buying of WMP and butter - will meet some pushback. He added demand elsewhere for WMP and fats remains patchy and price-sensitive while SMP is more affordable with the spread of values on offer.
“Strong commodity fundamentals are supported however by a firm EU-27 market with slow milk growth bringing tight butter and SMP supplies,” Boughton said.
“The late season improvements in NZ and Australia won’t alter the global market balance in the short-term but may present opportunities while northern hemisphere logistics remain knotted.”
Boughton said milk supplies in the US will gradually slow as farm margins weaken. Meanwhile the reopening of eating-out venues will lift cheese demand and tighten butterfat supplies as cream use picks up. US cheddar prices should improve as heavy stocks ease.
Volatility in the US is assured on the way out of Covid just as we saw on the way into crisis, Boughton concluded.
