Market Update July 24, 2023

Hi everyone,

Welcome to the OpenDairy market update.

Over the past week, we noticed limited activity and lower prices. The most interesting day was the day of the GDT event. During Tuesday's GDT event, we noticed some remarkable developments.

On the fat side, butter and AMF were sold at almost the same price. This is a phenomenon we have seen for the past few months. Typically, AMF should trade around 20% above butter, due to the fat content. We believe that the imbalances in fat demand, combined with limited demand for Whole Milk Powder could cause problems for New-Zealand producers in the season ahead.

Skim Milk Powder prices weakened slightly as well. US Skim Milk Powder seems competitive, but taking into account the higher freight rates, US and EU are competing firmly. We understood the demand indicator, which represents the buying interest per round, started very low. Normally, this is an early indicator of strong price drops, but this time the correction was limited. This shows that the Skim Milk Powder demand is still limited to those who really need to cover something. Waiting still seems rewarding. We do expect prices to stabilize as lower milk output in Europe and US will lead to firmer spot milk and concentrate prices.

The market is giving us more of the same. Supply and stocks are still overshadowing the market, with most buyers still not very active.

Thank you for your attention, we welcome your questions and remarks.

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