The dairy drama

Fonterra has opened its first European operations in the Netherlands, having entered into an agreement with A-ware of the Netherlands last year. The dairy giant’s investment in European operations indicates to me that it sees Europe as a continuing source of dairy ingredients. This is particularly true in light of the impending quota abolition and the US-EU trade partnership, which is set to change the flow of dairy products in this area of the world. And no doubt, in the rest of the world. Dairy’s place as a natural source of nutrition, coupled with the European reputation for quality, will ensure that dairy processors in this part of the world will see consumers clamouring for dairy products, whether they be powders or finished output.

It is exciting and unnverving at the same time. Will European processors be able to fill the demand, while dealing with moribund markets at home? Can they ramp up production without spilling over into oversupply? What will the emerging markets that seem so interested in dairy do, ie, China? We will find out in the coming months. Dairy is never a dull subject, and 2015 is underway as interesting already.