Irish milk not yet affected by lactose market setback

Glanbia Chairman Martin Keane: milk supply growth lower, but demand is sluggish.

China’s 700 million pigs eat about 400g of lactose each in their lifetime.

But, with a feared pig death toll of about one third due to African swine fever (ASF), thousands of tonnes of lactose will have to find a new market destination, a disruption which could yet affect milk prices paid to farmers.

The market problem became evident last November, as China’s whey and permeate imports fell.

By March, imports of these dairy commodities were down 27% year-on-year, with US exporters seeming to bear the brunt of this slump in demand, because of the US-China trade war.

In fact, imports from the EU rose, according to estimates by analysts at Rabobank, the global agri-bank.

But global prices for whey powder and lactose have fallen due to the market shock.

It didn’t affect milk prices announced by co-ops here for April milk, with most maintaining prices unchanged from the March level.

Glanbia Chairman Martin Keane said: “While milk supply growth in key regions is lower than previous years, demand is sluggish in some markets due to trade wars and other issues.”

A Lakeland Dairies milk price statement said: “The ongoing uncertainty in the European dairy markets continue to cast a shadow on the sector.

“In terms of production, the news is positive, with supply in the main milk producing countries under pressure.

“However, in terms of demand, the situation is sluggish in Europe with stores still full of product as a result of the uncertainty of Brexit.”

Other market developments include Ornua’s Purchase Price Index rising to 105.9 for April, up from 104.1 in March.

EU dairy exports have gone well in the first three months of 2019, with skim milk powder exports in March up 35% from last year’s record level, and first quarter cheese exports rising 27% to Japan, now taking a 13% share of EU cheese exports, and cheese exports to China rising 22% from a low base.

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