CHICAGO — No-melt cheeses offer consumers and culinary professionals opportunities to make dairy a center-of-plate protein. The cheese retains its shape when cooked and may be used to replace meat in all types of dishes, including breakfast sandwiches.
“Firm, moist cheeses like panela and paneer are proving to be popular options to bring quality protein to the plant-forward plate,” said Ben Yee, director of producer partnerships, California Milk Advisory Board (CMAB), Tracy, Calif. “Panela has a mild flavor similar to a dry pressed ricotta, without melting, so it holds up well as the base for dishes like tacos or even as a meat-like medallion in a tomato sauce. Paneer can be marinated in spices and grilled for kebobs or in sandwiches.”
The CMAB worked with chefs to educate them about the benefits of no-melt cheeses. Dishes that were developed include Nashville hot paneer, where the cheese replaces chicken, and a keto lasagna, where paneer stood in for noodles.
The New York-based Blue Apron meal kit service started offering an “international escape” menu this winter. One of the offerings is paneer and vegetable tacos with peanut and arugula salad. The consumer is instructed to pan fry the diced paneer and then stuff them into flour tortillas alongside sautéed sweet peppers and onion, guacamole and a chipotle sauce.
“These cheeses don’t melt due to their protein structure,” said Suzanne Fanning, chief marketing officer and senior vice president, Dairy Farmers of Wisconsin, Madison, Wis. “Either baked or grilled, these cheeses can form a sweet, caramelized, toasted ‘crust’ that is oh-so-delicious.”
Recognizing this growing trend for center-of-the-plate cheese, Cheeses of Wisconsin, Cottage Grove, Wis., created The Big Moo, which “cooks crispy on the outside, warm and melty on the inside.” What distinguishes The Big Moo from other no-melt cheeses is it is available in flavors like bacon, cheese pizza, jalapeño and roasted garlic. The company promotes the product as keto-friendly with one serving containing 6 grams of protein.
“Gayo Azul Queso Blanco is a white mild and fresh cow’s milk cheese that is growing in popularity,” said Debbie Seife, director of marketing, FrieslandCampina Consumer Dairy North America, Paramus, NJ. “Consumers are enjoying cooking with it and adding it to their meals and dishes. It is also fantastic crumbled over enchiladas, tacos, salads and soups.”
Another Hispanic ingredient cheese gaining traction in the United States is cotija. It is a crumbly, slightly salty cow’s milk cheese.
“Most people have likely had it on tacos, but where it is trending now is in the many varied street corn dishes showing up on menus and in supermarkets,” Ms. Seife said. “The traditional dish is made with corn on the cob, spices and cotija cheese.”
The sharp, tangy cheese does not melt when heated. However, it has an adhesive quality when grated that enables it to cling to corn or other foods. This makes it an appealing ingredient as a garnish on hot dishes.
“Consumers are opening themselves up to experimenting with cheese and to creating plant-forward dishes that still satisfy their cravings,” Mr. Yee said. “Cheese is the ‘glue’ that holds these dishes together, providing the flavor along with the functionality. The biggest challenge is lack of understanding of these lesser-known varieties because they are most often associated with Indian, Mediterranean or Mexican dishes.”
New forms and flavors
Cheese has been an integral part of Italian cooking, sometimes even the center of the plate. One dish that is rather new to the United States and really taking off on menus is cacio e pepe, which translates to “cheese and pepper.” The preparation uses long, thin, cooked noodles, such as angel hair or spaghetti, that are spun with warm pasta water in a partly hollow wheel of pecorino Romano cheese. It is then heavily seasoned with black pepper.
Datassential, Chicago, reports that cacio e pepe was on 48% more menus at the end of 2022 than it was four years earlier. Curious consumers also are experimenting with the cheesy pasta dish that some say is an early ancestor to the US staple of macaroni and cheese.
Norseland Inc., Darien, Conn., offers Lotito Presto Cacio e Pepe Pasta Starters. The refrigerated line comes in four varieties: original, con Pomodori (with sun-dried tomatoes), con Erbe (with wild herbs) and con Picante (with Calabrian chilies). The blends have sheep’s milk pecorino Romano cheese as the No. 1 ingredient. Whole milk powder and whey powder are critical components of the sauce mix. To use the mix, the consumer prepares 1 lb of pasta. During draining, one cup of the hot water is saved and added to the sauce starter, then tossed with pasta. Two shelf-stable varieties — original and black truffle — will enter the market this spring.
Norseland was one of the first to market refrigerated cheese wraps, a high-protein alternative to traditional flour-based tortillas and flatbreads. Folios Cheese Wraps are par-baked sheets of cheese that are free from carbohydrates and gluten. The original line debuted in 2016 in cheddar, Jarlsberg and Parmesan varieties. This year Norseland added mozzarella to the line. The higher moisture content of mozzarella presented baking challenges that the company managed to overcome. The keto-certified wraps may be stuffed, rolled, folded, melted, crisped and baked, said Valerie Liu, brand manager.
Sofia Auricchio Krans, a cheesemaker with BelGioioso Cheese Inc., Green Bay, Wis., said the company has developed a number of cheeses intended for adding kick to all types of recipes. They provide an additional layer of flavor through a familiar format.
“Pepperoncino has spicy red pepper flakes added to the curd for a little heat,” Ms. Auricchio Krans said. “Our Artigiano cheese comes in blueberry, vino rosso (wine) and balsamic with cipollini.
“Our fresh mozzarella is offered marinated with a variety of spice blends, including pesto, hatch chili and white truffle oil,” she said. “We have an espresso-infused mascarpone that goes great in desserts.”
Today, the U.S. Food and Drug Administration (FDA) issued, for comment, draft guidance to help ensure appropriate labeling of plant-based products that are marketed and sold as alternatives to milk (plant-based milk alternatives, or PBMA). This draft guidance will provide industry with recommendations that will result in clear labeling to empower consumers with information to help them make more informed purchasing decisions. It also clarifies that the common or usual names of some PBMA have been established by common usage, and these names include “soy milk” and “almond milk.”
The FDA recommends that PBMA products that are labeled with the term “milk” in their names, such as “soy milk” or “almond milk,” and that have a nutrient composition that is different than milk, include a voluntary nutrient statement that conveys how the product compares with milk based on USDA’s Food and Nutrition Service (FNS) fluid milk substitutes nutrient criteria. These statements will help consumers make informed dietary choices when it comes to understanding certain nutritional differences between plant-based products that are labeled with “milk” in their names and milk. If a PBMA is not labeled with “milk” as part of its name, but instead is labeled with another term like “beverage” or “drink” and does not make a claim comparing the product to milk, then the voluntary nutrient statement recommendations in the draft guidance do not apply.
In 2018 the FDA issued notice soliciting comments from the public to gain insight into how consumers use PBMA products and how they understand the term “milk” when included in the names of products made, for example, from soy, peas and nuts. The agency received more than 13,000 comments.
After reviewing these comments and conducting focus group studies with consumers, the FDA determined that consumers generally understand that PBMA do not contain milk and choose PBMA because they are not milk. However, many consumers may not be aware of the nutritional differences between milk and PBMA products. For example, almond or oat-based PBMA products may contain some calcium and be consumed as a source of calcium, but their overall nutritional content is not similar to milk and fortified soy beverages and thus they are not included as part of the dairy group in the Dietary Guidelines, 2020-2025. Both the public comments and focus groups helped inform the agency on its recommendations in this draft guidance.
To Submit Comments:
Comments on the draft guidance should be submitted within 60 days after publication in the Federal Register. You may submit electronic comments to Regulations.gov. All written comments should be identified with the docket number FDA-2023-D-0451 and with the title of the guidance document.
Les échanges commerciaux de produits laitiers sur le marché mondial ont reculé de 2 % en 2022, en équivalent matière sèche du lait, calcule Global Dairy. Cette baisse est le reflet du recul de l’offre mondiale et de la demande, notamment de l’ensemble Chine/Hong-Kong, à cause de la flambée des prix. A noter que les États-Unis se distinguent avec une belle envolée de leurs envois. Sur le seul mois de décembre, la baisse est de 1,8 %, recul imputable en premier lieu à la baisse des exportations néo-zélandaises de poudre grasse vers l’ensemble Chine/ Hong-Kong. Beurre et lactosérum étaient aussi un peu moins échangés sur le marché mondial, mais poudres de lait écrémé, fromages et matières grasses affichaient des progressions.
Les exportations de produits laitiers de la Nouvelle-Zélande vers la Chine évoluent
En janvier, les achats chinois de poudre grasse à la Nouvelle-Zélande sont restés limités (-5,5 %), mais l’île océanique fait évoluer son mix produit avec davantage de poudre de lait écrémé, dont elle a exporté au total 51 300 tonnes en janvier, 70 % de plus que l’an dernier, et 55 % de cette croissance était à mettre sur le compte de l’ensemble Chine/Hong Kong. Les exportations de matières grasses y ont aussi progressé de 12,9 % à 10 750 t.
After a steady decline in pricing on the Global Dairy Trade (GDT) auction since October last year, the overall price index increased by 3.2% at the latest event.
Price increases were recorded for almost all contracts, with only a couple of exceptions on nearby skim milk powder (SMP) and cheddar contracts.
Overall, all product prices moved up, or remained unchanged, during the auction on Tuesday (7 February).
Total volumes sold also increased, but prices were bid up on the back of increased activity as buyers return to the market after a quiet January.
The fats categories of butter and anhydrous milk fat (AMF) saw the biggest moves, with average prices up by 6.6% and 4.8% respectively from the previous event.
Whole milk powder, which dominated sales with over 50% of the volume, increased by 3.8% to USD$3,329/tonne.
While a good result for whole milk powder (WMP), the average price is still 23% below where it was at the beginning of February last year.
Skim milk powder was less in demand, with the average price on contracts for delivery in March and April down by 0.5%.
There were small increases in average prices on other contracts, but overall, the weighted average price remained at USD$2,829/tonne.
China is ramping up its efforts to move past the immense impacts COVID-19 has had on the country over the past three years, including removing all requirements for nucleic acid testing on frozen food imports and reducing tariffs.
Its latest move brings it in line with current World Health Organization (WHO) guidelines, and is widely considered to be part of China’s strategy to start its return to normalcy.
The country is also paying renewed interest to its free trade agreement arrangements, including the Regional Comprehensive Economic Partnership (RCEP) ratified in 2022 under which tariffs of products from certain countries such as Indonesia will be adjusted accordingly.
China’s national ‘Excellent Milk’ project says it is on track to implement further quality and safety advances to locally produced dairy as it seeks to slash reliance on imports.
The project was responsible for developing a standards system covering various quality and safety parameters, and most recently it also unveiled an Excellent Milk logo for successful dairy companies.
In addition to quality and nutritional fortification studies, the project has also conducted in-depth research to improve food safety controls for dairy in China, hoping to reduce any lingering concerns due to longstanding food safety issues in the past.
The company claims peanuts are not only on par with the more conventional soy-based plant-based products, but also superior when it comes to certain nutrients such as vitamin E.
Haofood has created various dishes using its peanut-based meat, such as meat skewers, which are produced by its proprietary technology.
Besides taste and health attributes, a recent study by Haofood found that Chinese consumers are increasingly clean label-conscious. The firm also believes that making products in convenient formats is key to attracting consumers, particularly those from the younger generation.
The Action on Salt China (ASC) programme was launched in 2017 to implement several salt-reduction initiatives aimed at local restaurants, schools, hospitals and communities.
However, in 2020, the average salt intake of China residents was 11g a day per capita, significantly higher than WHO’s recommendation of below 5g a day. The Chinese government has since set a target of a 20% reduction in salt consumption in adults by 2030 as part of its Health China 2030 initiative.
A study was conducted to evaluate the one-year effectiveness of town-level comprehensive salt reduction intervention. Despite mixed results, researchers argued that reduction strategies would require several years to trickle down.
Helicobacter pylori (H. pylori) is a bacterium in the stomach that is associated with several gastric diseases. The first line of treatment for H. pylori infection typically consists of eradication drugs, including antibiotics, which have been reported to cause short-term disruptions of the gut microbiota.
A study found that the reduction of gut Bacteroidetes was neutralised by probiotics supplementation, indicating the ability of probiotics to maintain equilibrium of the gut microbiota ecosystem during exposure to antibiotics.
The results also highlighted a need to develop high-efficacy probiotics that target multiple parts of microbiota to improve resilience of the microbial ecosystem.
CHICAGO — Muscle-building” cookies, “refueling” smoothies and “satiating” breakfast foods often rely on protein to make such marketing claims — but not just any protein. Many food formulations are fueled by dairy proteins, namely whey, in one of its many formats.
The choice of protein is an important marketing tool of the product’s “power.” Unfortunately, marketers are limited in how they may communicate this because regulators have put the topic of protein quality and availability on the backburner. Some argue it’s time to bring it back into the conversation.
“As headlines proliferate around the need to supply protein to an ever-growing global population, the common argument has emerged that people around the world are already consuming more than they need,” said Paul Moughan, distinguished professor at Massey University and a fellow laureate of the Riddet Institute, Fitzherbert Palmerston North, New Zealand. “While this may indeed be true in terms of total protein, it is unfortunately not the case when it comes to their intake of available protein.
“A child in India, for example, may be consuming a diet that is heavily based on cereals and root crops. The child may be getting plenty of protein but could still be heavily deficient in available protein and key amino acids. This deficiency can lead to stunted growth during childhood and result in them never fulfilling their true potential.”
Currently the Protein Digestibility Corrected Amino Acid Score (PDCAAS) is used to assess the quality of all protein. The score is an adjustment for the quality of the protein. It is based on the types and amounts of amino acids in the food as well as the overall digestibility. The PDCAAS values range from 0.0 to 1.0, where values are truncated to a maximum score of 1.00, which cow’s milk, casein, whey, eggs and soy protein all possess. Most plant protein sources have much lower values.
Dr. Moughan, and other protein authorities, believe Digestible Indispensable Amino Acid Score (DIAAS) is a better reference point. The DIASS analysis enables the differentiation of protein sources by their ability to supply amino acids for use by the human body. It also demonstrates the higher bioavailability of dairy proteins when compared to plant-based protein sources.
“I think DIAAS is a method that provides a measure of protein quality that reflects the true digestibility of a protein,” said Kimberlee Burrington, vice president of technical development, American Dairy Products Institute, Elmhurst, Ill. “I think it could boost dairy’s reputation as a high-quality protein, but to be truthful, we haven’t done the best job communicating that even with the high PDCAAS values for dairy protein.
“Consumer research shows most consumers aren’t aware of, or aren’t able to distinguish, that proteins have differences in protein quality. We use the Nutrition Facts panel to communicate the grams per serving of protein, but the only way to show a difference in protein quality is by using the % Daily Value.”
The % Daily Value for protein is determined using PDCAAS. A yogurt containing 10 grams of milk protein may make an “excellent source of protein” claim. A cultured vegan product with 10 grams of protein from peas and nuts most likely only qualifies for a “good source of protein” claim, and when doing so, should not flag 10 grams of protein per serving, as it is misleading. When making or implying any protein content claim, the Food and Drug Administration requires the inclusion of the % Daily Value.
“Most products that don’t claim anything about the level of protein on the product will not show anything in the % Daily Value column,” Ms. Burrington said.
If DIAAS were put into place, products containing whey proteins would be able to better communicate their value. Unfortunately, it’s been 10 years since a report from the Expert Consultation of the Food and Agriculture Organization of United Nations (FAO) recommended using DIAAS, yet it has not been implemented.
Data in the FAO report showed whole milk powder to have a DIAAS score of 1.22, far superior to the DIAAS score of 0.64 for peas and 0.40 for wheat. When compared to the highest refined soy isolate, dairy protein DIAAS scores were 10% to 30% higher.
Dairy proteins have a high DIAAS score because of the presence of branched-chain amino acids, which help stimulate muscle protein synthesis. Each dairy protein has more branched-chain amino acids than egg, meat, soy and wheat proteins. Whey protein, specifically, is seen as higher quality because of the presence of leucine, a branched-chain amino acid accountable for muscle synthesis.
“We strongly support adaptation of DIAAS for measuring protein quality,” said Peggy Ponce, director of product innovation for Agropur, which has US offices in Minneapolis. “Foods and beverages are being marketed by highlighting the ‘grams of protein’ without a meaningful comparison of the protein quality. Once DIAAS is widely accepted, product developers can discern the nutritional value of proteins in formulations, which will lead to better consumer choices of protein-fortified foods and beverages. Consumer education will be a critical part of making sure they understand the high nutritional quality of proteins from milk and whey.”
What’s holding up the implementation of DIAAS? While there are some in the plant-based community who oppose DIAAS, one of the most significant holdups is the development and implementation of a protein database.
The Riddet Institute led a research program to address the supply of protein for human diets. The program is funded by a consortium of commercial food organizations through the Global Dairy Platform.
The first stage has been completed. This stage was a collaboration between the Riddet Institute, Wageningen University in The Netherlands, the University of Illinois Urbana – Champaign and AgroParisTech in France. The researchers developed, standardized and validated methods based on the growing population to determine the digestibility of amino acids for human foods. The methods were applied in different laboratories in different parts of the world and achieved consistent results, Dr. Moughan said.
They now are working with Wageningen University and the University of Illinois to examine the digestibility of numerous protein sources in a form consumed by humans using DIAAS. An openly available global database of protein quality will be constructed, including 100 different protein sources. The protein sources will be from a large range of different protein types, including protein sources commonly consumed in developing countries.
The company, which supplies cocoa, coffee, dairy, nut and spice ingredients, asked over 1,500 consumers in Germany, France, UK, Italy and Sweden about their attitudes to plant-based beverages, desserts and ice-cream market.
The survey revealed interest in plant-based products continues to grow, showing high potential for plant-based as something new and complementary for European diets. 61% of consumers indicate they are consuming more plant-based products than two years ago, and 58% expect it to increase in the coming two years.
Dairy alternatives specifically are carving out an identity beyond being a mere substitute, according to ofi. Two thirds (67%) of consumers see plant-based dairy as complementary to dairy products, and ‘an opportunity to try something new’ (65%), particularly for indulgent product categories including ice-cream, desserts and cocoa beverages.
But players are missing significant opportunities in this market, said ofi. The plant-based beverages, desserts and ice-cream market is worth an estimated €5.3bn in 2022, according to Euromonitor data. Yet there is significant opportunity if key formulation challenges faced by manufacturers can be addressed. For example, over a third (35%) of the consumers polled are dissatisfied with the plant-based dairy product they tried. Further, 8% of consumers switched back to dairy as they did not like the first plant-based product they tried. More than a fifth (22%) of all those polled do not believe plant-based products can taste great. Even current users (61%) say that bad taste and texture is preventing them from consuming more plant-based products.
Nuts can play a role in addressing taste and texture in this category, ofi stressed. According to the survey, 48% of people believe nuts are tasty (compared to soy: 23%, and oat: 35%). 43% believe nuts are rich in nutrients (compared to soy: 24% and oat: 36%). 35% believe nuts are high in protein (soy: 26%, oat: 21%).
ofi’s Chief Innovation & Quality Officer, Kamesh Ellajosyula stressed that in formulating plant-based proteins, nuts prove a popular choice, with the consumer survey revealing that nuts stand out compared to soy and oats as having a good taste and being rich in nutrients. Almonds, cashews, and hazelnuts were strongly associated with being tasty, natural, and healthy. “Manufacturers have a huge opportunity to dial up taste and health benefits but face ongoing formulation challenges,” he said. “Consumers who enjoy plant-based want wholesome products with real ingredients but instead may find products have added sugars, masking agents and stabilizers.”
“Equally, it doesn’t have to be all or nothing. Our dairy team is co-creating with our nuts R&D specialists to find exciting hybrid solutions that can combine the functional, nutritional and sustainability benefits of both dairy and plant-based.”
Ofi’s focus on reporting through granular data and metrics was recognized with its Cocoa Compass sustainability strategy and impact reports winning the Sustainability Innovation Award at Food Ingredients Europe. ofi’s Chief Marketing Officer, Briony Mathieson added: “75% of all consumers surveyed say they are willing to pay more for a sustainable product. ofi’s extensive farmer programs mean we can help customers source ingredients with a powerful narrative about communities and planet. We make this real through our product sustainability strategies such as Cashew Trail and Coffee LENS. By collaborating with our customers from plant to palate we can together be the change for good food and a healthy future.”
Laura Barber, Vice President Consumer and Market Insights at ofi, stressed that the need for a ‘new way of talking about plant based dairy products’. “This market isn't just cannibalising dairy,” she said. “This is adding something to the market which is exciting. Indulgent categories particularly like desserts and ice cream are seem as being something new that complements their diet, not necessarily a substitute.
"There are big numbers to go after and make sure we are capturing that revenue opportunity and we expect as these categories grow, consumers tastes will become more sophisticated, and their expectations will continue to increase.”
Higher beef, broiler, and turkey forecasts partly offset lower pork production in Q4 2022, leading USDA to raise the forecast for 2022 red meat and poultry production to 107.53 billion lbs. in the December “World Agricultural Supply and Demand Estimates” report.
USDA raised the 2022 beef production forecast to 28.42 billion pounds (lbs.) due to higher expected cattle slaughter as well as heavier carcass weights. Pork production, however, was lowered to 27.06 billion lbs. due to lighter carcass weights. Broiler and turkey production were raised to 46.10 billion lbs. and 5.21 billion lbs., respectively, on current slaughter and hatchery data.
Egg production was raised slightly to 9.03 billion dozen on revised third-quarter data.
For 2023, USDA left the beef and pork production forecasts unchanged. Broiler production was raised on more rapid expected growth in bird numbers later in the year while turkey production was lowered for the first half of the year on recent discoveries of highly pathogenic avian influenza. Egg production was also lowered due to a slower expected pace of recovery. USDA only raised the 2023 total red meat and poultry production forecast slightly to 106.81 billion lbs.
USDA raised the 2022 and 2023 beef export forecast. The 2022 pork export forecast was lowered while 2023 was left unchanged. The broiler export forecast for 2022 was raised on recent trade data, while 2023 exports were lowered. Turkey exports was left unchanged.
USDA left price forecasts for cattle, hogs, and broilers unchanged for 2022 and 2023. USDA has the 2022 and 2023 cattle price at $144.15/cwt. and $156/cwt., respectively. The hog price forecast for 2022 and 2023 is $71.33/cwt. and $67.00/cwt., respectively. The broiler forecast for 2022 and 2023 is $1.41/lb. and $1.31/lb., respectively.
The turkey price forecast for 2022 was lowered to $1.55/lb., but the forecast for 2023 was left unchanged at $1.53/lb. Egg price forecasts for 2022 and 2023 were raised to $2.78/doz. and $1.94/doz. due to recent prices and expectations of continued firm demand and tight supplies.
USDA left its 2022 milk production forecast unchanged from last month at 227 billion lbs. while the 2023 production forecast was raised slightly to 229.5 billion lbs due to higher expected cow numbers and slightly more rapid growth in output per cow.
For 2022, USDA raised price forecasts for butter and cheese on recent prices and expectations of continued strength in demand. However, whey and NDM prices were unchanged. The Class III price was raised due to a higher cheese price, and the Class IV price was raised due to a higher butter price.
As for 2023, USDA raised the price forecasts for cheese and butter for continued demand strength but lowered the NDM and whey prices due to pressure from international markets. The higher cheese price more than offsets the lower whey price. The Class III price was raised while the Class IV price forecast was lowered, reflecting the lower NDM price, USDA said.
All things considered, USDA raised the 2022 all milk price forecast to $25.65/cwt. and the 2023 all milk price was raised to $22.70/cwt.
Australian consumers are seeing significant price increases across dairy products – based on the national Consumer Price Index (CPI) data – with milk prices having risen at the fastest rate since records began, according to a new report by agribusiness banking specialist Rabobank.
In its Global Dairy Quarterly Q4 2022 – Walking the Tightrope into 2023, Rabobank says while the Australian consumer has shown resilience in the face of cost-of-living pressures, signs of dairy demand weakness are emerging as a willingness and ability to spend on discretionary items softens.
“Households are trading down to private label offerings, with volume declines in grocery and foodservice channels being more evident – it looks set to be a tough year ahead for Australian consumers,” said report co-author Michael Harvey, senior analyst for Dairy and Consumer Foods at Rabobank.
“For Australia’s dairy producers, farmgate margins remain positive and are supported by the record milk prices.
“Average farmgate milk prices across Australia’s Southern Export regions range between AUD 9.50-10.00/kgMS.
“The high milk prices have mostly offset major cost headwinds – fertiliser, fuel and feed – for dairy farmers. While labour availability remains a major challenge for dairy farming businesses.”
Mr Harvey said Rabobank is not expecting further major lifts in milk prices as the season draws to a close.
Production
Rabobank is revising its milk production forecast downward for 2022/23, with the impact of production constraints, the result of flooding and excessive rainfall, becoming visible in the peak production months – October and November. The report said as of October, Australian milk production is down 6.6 per cent for the season to date, with widespread decreases across all states/regions.
“A wet summer is in play across much of eastern Australia– driven by the La Nina in the tropical Pacific Ocean and a negative Indian Ocean Dipole (IOD),” said Harvey.
“And many dairy production regions on Australia’s east coast have been dealing with excessive rainfall and flooding.
“There has been significant feed and fodder losses as a result of the rain and flooding – it is one of the key challenges faced by impacted farms. Some supply chain/logistics issues have been reported as a result of the wet weather – including some dumping of milk – but not to the point of having a material impact on milk processing,” he said.
Dairy farmers can look forward to access to plenty of supplementary feed in the months ahead. Rabobank is expecting a large winter wheat crop, with harvest now underway – albeit somewhat delayed by rain and flooding.
Exports
Australia’s dairy exports continue to grow despite falling milk supply. Mr Harvey said this is supported by improvements in global freight markets and normalising consumer behaviour – post COVID – across export markets in Asia.
“Australia’s total dairy export volumes (tonnage) were four per cent higher in the first two months of 2022/23 season. However, it was a mixed bag – liquid milk exports are running strong, but it has been a slow start for cheese and whey,” he said.
Global outlook
Weaker global dairy markets remain a key theme as 2022 comes to a close, the report says. But there is clear divergence between regions and dairy products.
The Rabobank report says cheese and butter prices in the US and EU have performed the best, while Oceania Global Dairy Trade (GDT) powder and butter prices have been on the decline. Oceania skim milk powder (SMP) prices led the way, dropping 14 per cent on average from Q3 2022 end prices and plummeting 34 per cent since the peak in early Q2 2022.
The second half of 2022 has tested dairy’s affordability for importing countries. “China remains conspicuously quiet on the buying front compared to last year as it digests local inventories and imported stock,” the report said.
“The US dollar lifted by six per cent on a broad dollar index basis at its peak during Q3, before eroding much of the gains by mid-November. Yet, weaker US dollar-priced dairy commodities have incentivised tier two and tier three buyers to return to the market, taking the opportunity to refill inventory pipelines as tourism returns and hospitality recovers.”
Rabobank expect the global milk supply ‘recession’ experienced for the past five consecutive quarters to end, with production having progressively declined over that period.
“Q4 2022 brought another period of weather-disrupted production to Oceania. But traces of life from the global export engines are sprouting, driven by Europe and the US. Rabobank expects milk supply will gain modest momentum in 2023 from most regions apart from Australia” it said.
Milk production from the big seven dairy exporting regions – New Zealand, Brazil, Argentina, Uruguay, EU, US and Australia – is anticipated to grow by one per cent year-on-year, enough to offset the 0.8 per cent decrease in 2022 and remain on par with 2021’s production, the report said.
Meanwhile, consumption growth in some export regions is becoming more challenging as consumers juggle significant price increases in the dairy cabinet.
“Dairy demand in the US has remained defiant in the face of cost-of-living challenges, while European consumers are now feeling the pinch at the retail level. Some resilience in Southeast Asia is evident, but smaller sales volumes and downstream margin pressure illustrate the headwinds,” the report said.
Rabobank analysts say all eyes remain fixed on China.
“Buying patterns will remain subdued across 1H 2023 if rolling lockdowns remain a feature, milk production continues to be set on growth mode, and consumption wavers as challenging economic conditions take hold. China is likely to re-enter markets in Q2 with a bigger presence from Q3 2023 onward,” the report said.