The outlook so far

Although not all dairy is traded globally, what happens in other parts of the world can impact our local dairy market, particularly on the commodity side. When the European Union starts stockpiling whey powders, the traders get uneasy. If China decides to restock their porcine population more slowly than anticipated, whey takes a hit and the powder suppliers take notice.

However, as seen before, most of our fresh dairy is produced and consumed within a relatively small radius of where we live. I doubt much of it was stuck in the Suez Canal recently, unlike the garden gnomes that are in short supply here in the UK right now due to the shipping pileup.

The United Nations Food and Agriculture Organisation released figures for 2020, noting that the global output for milk hit nearly 906 million tonnes last year. Asia saw increases of 2.6 per cent to 379 million tonnes, with increases seen in India, China, Pakistan and Turkey. In fact, most regions saw increases, except Africa, which remained stable. China’s status as a key dairy importer continued, with purchases of 17 million tonnes of milk products, a 7.4% increase over 2019, partly induced by the early end of Covid-19 lockdowns but driven mainly by rising per capita consumption among affluent and urban consumers and expanding consumer base, the FAO reports.

The International Monetary Fund is also optimistic for 2021, noting that world GDP is expected to reach 6.6 per cent this year, with the global economies recovering a bit better than expected.

However, the fate of this enthusiasm rests of what happens with the coronavirus, as with everything else. Nate Donnay, director of dairy market insight at StoneX, said in his recent webinar that the rest of the world is not feeling as exuberant as the US is, due to the lower levels of vaccinations outside of a few countries.

I suspect that as the year goes on, where those shots are landing will start making more of a difference. Not only will you want your dairy to be local, but your local vaccine production plant. Now that is truly a global supply chain.

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