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Dairy market review - Price and policy update, July 2021

Copyright licence

Year of publication 2021

Place of publication Rome, Italy ;

Pages 12

Author FAO

Publisher FAO ;

Category Bulletin

Edition 1

Synopsis (short abstract) International dairy prices, measured by the FAO Dairy Price Index, fell slightly in June, ending 12-month of uninterrupted increases. At 119.9 points in June, the global dairy price index stood at 22 percent above its level one year ago. International quotations for all dairy products represented in the index fell in June, with butter registering the highest decline, underpinned by a faster decline in global import demand and a slight increase in inventories, especially in Europe. Whole milk powder prices declined on reduced purchases by China and lower demand for spot supplies, while global export availabilities remained adequate to meet existing orders. Quotations for cheese and skim milk powder weakened slightly also on reduced global import demand amid somewhat higher export supplies from major producing regions.

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FAO. 2021. Dairy Market Review. Price and policy update, July 2021. Rome. 

Language English

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    The FAO Dairy Price Index recorded 192 points in October, an increase of 9.8 points (5.4 percent) since January, but 83.4 points (30.3 percent) below its peak reached in February 2014. From January to May, the index value rose by 24 percent, but from June to October, the value dropped by 15 percent. Dairy price increases in the first three months in 2019 primarily stemmed from limited export supplies along with strong internal demand in Europe and seasonally tight export availabilities from Oceania. From April to May, international demand for dairy products remained robust, while export supplies were relatively limited due to drought in Oceania, especially Australia, but also dry weather in Europe during the summer. Since June, dairy prices weakened, reflecting a market optimism over possible increases in export supplies from Oceania, mainly New Zealand, in its 2019/20 production season. Milk production in the North and South America was stable, providing stability to international prices. In Europe, prices weakness stemmed from relative inactivity of dairy markets due to summer holidays. Increased export availability further added to price weakness towards September and October.
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