International market of dairy 2022, according to USDA

The Russian invasion on the Ukrainian territory seems endless, and maintains the effect bassist on the international trade. This added pressure to the already existing commercial crisis generated by the COVID in 2020 and the resurgence of cases in China to 2022 having to return to the running of the bulls in the cities emblem of the economy east as Beijing and Shanghai during the first half of 2022. The rising cost of grain, fertilizer, and energy got pressure to the primary production and in the major exporting countries to 2022 will be a year of setbacks in the production of milk with a volume -1% estimated decline. Is that the price to the producer on all sides have grown significantly, but the costs have grown more and that is not enough. This reduction in production generates less export supply that comes in handy to unzip the fall of the prices and to avoid an accumulation of stocks.

In July 2022, the USDA published its usual report Dairy: World Markets and Trade with the evolution of production, consumption, import and export for the milk and major dairy products from global trade. By doing a simple exercise we compare the expected variation for the current year 2022 in the total volumes exported and the total volumes imported over the past year to get an idea of the final balance. Arose the following graph that we share:

What we see here is that for our main exported products we will have on the one hand the positive voltage in the market Milk Powder because the volume exported will suffer a fall greater (-6%) to the fall of the volume imported (-3%), which is an incentive for the prices. By the side of the Cheese there would be a higher volume exported in 2022 than there were in 2021 (a +2% extra), an increase of +1% in the volumes imported, which could suggest pressure on prices.

Marcos Snyder

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