BUTTER – It has definitely been an interesting few weeks on the butter market as there has been a large reduction in prices. This has prompted various sellers to place significant volumes into the Private Storage Scheme, despite the EU Commission having reduced the aid for storage this year.  It would indicate that the current price levels are low enough to attract people to storing butter for the historically bare Autumn months.  We, at Staples Dairies, are happy to talk to any customers who wish to explore this EU mechanism for ensuring supply at the end of the year.

It has yet to be seen if the butter market will fall any further, but if the Sterling/Euro currency changes and cream becomes more attractive for manufacturers to export to the continent then this could stabilise the market.  Similarly if the large volumes of butter continue to be placed into PSA this could also alter the balance of supply/demand.

MILK AND CREAM – Milk volumes are increasing and cream prices dropping, this was also causing the fall in butter prices.  With the flush coming this could also cause further volatility in the market unless manufacturers turn the milk into cheese production.

POWDERS – Milk powders are similarly reducing and buyers are cautious about buying too far forward on these products.

CHEESE – The market, particularly for Cheddar, has been less affected by recent falls in other dairy product prices.  Whilst butter, cream and powders are traded internationally to a generally common specification, cheddar as far as Europe is concerned is still a UK market.  Gouda is used as the benchmark elsewhere in Europe.  Consequently cheddar is a little insulated from the demands of the European dairy market.  Having said this prices have tended to ease down from c £2900 to c £2800 for Home Produced with imported trading a little lower.  Nowhere near the recent fall of butter prices.  Of course, if cheese returns a better price for milk than butter/powder then the temptation is to make cheese which could put that market under pressure in months to come.

IQF – According to the pricing updates from our suppliers in China, the prices of onion products are coming down.

The new crops for this month are Water Chestnuts, Celery, Mushrooms and Potatoes.

At Staple Foods we are always looking for new product ideas to complement our existing portfolio of products.

We are particularly interested in developing import and export opportunities in SE Asia and Europe.

Because of our financial strength and routes to market we are always pro-active in sourcing new credible supply partners who are willing to conform to our exacting standards.

Current new product developments are:

Products: IQF Fruit, Baby Food, German Sausages, Ready Meals, Pasta in Sauce, Rice Flour & Ground Rice

Packaging: Ambient pouch (doypack) long life ambient packaging

Contact our Marketing Director if you wish to discuss Staple Food Group representing your business both in the UK and in SE Asia.

Call Mark Venning on 01689 888741 or e-mail  markvenning@staplefoods.co.uk

DAIRY MARKET REPORT – FEBRUARY 2012

Since the awareness, prior to Christmas, of the impending arrival of butter from New Zealand, the butter market dropped dramatically and customers realised that they should cover through for Q1.  Because the weather over the Christmas period was mild there was more milk available and cream was churned into butter.  With the weakness of the Euro v Sterling it also meant that exports of cream to the continent were not as attractive as previously which kept butter prices at a lower level than in the winter of 2011.

At the moment there is stability in pricing, however with Private Storage Aid looming on the horizon this could possibly change the situation and perhaps indicate to customers and manufacturers there could be a reason to place butter into this scheme whilst prices are lower than usual.  If this did occur it could well take butter from the open market and tighten supply.  But, as always, until we get nearer to the time it is purely speculative.  The EU Commission have not, as yet, published the aid available for PSA this year and this might make potential uptake of the scheme an easier decision to reach for interested parties.

Powder prices however, are increasing as there is more demand from world markets at present.

Cheese prices have settled but by relatively small amounts compared to the movement in butter prices.  Continential cheeses including cheddar have seen the benefit of the improved Sterling/Euro exchange rate.  However, UK cheddar prices have not felt the need to respond fully to these prices as they feel that demand and stock are in balance.  Milk prices on the continent are holding or starting a slow recovery and the slight fall back in the exchange rate has steadied the market.  With peak milk production on its way it is still not clear if this situation can hold.

 Bulk Butter prices are falling and this process is expected to continue into the early New Year. The arrival during Jan – March of 30,000 mt of New Zealand butter has sent a worrying shockwave through the European traders who have moved quickly to reduce prices despite the relatively tight supply situation. New Zealand will still have the option to ship another 45,000 mt to E.U. later in the year but for the moment this is pure speculation.

 Milk powder prices have remained stable and future prices look untroubled although it would seem inevitable that milk prices will ease back over the next few months, supply and demand being in balance, pressure could push prices lower.

 Similarly Cheddar prices have settled into a range which shows little sign of moving as supplies are sufficient to meet demand. European/Irish cheddar prices are subject to the vagaries of the Sterling/Euro exchange rate and at the current rate (1.1650) there is little to encourage imports. However there is talk of a better rate (bank talk) and if European prices in euro fall the opportunities for cheaper cheddar may yet present themselves.

Traditionally commodity prices fall post Xmas but this did not happen in early 2011, in deed prices went up, so although butter prices are already falling there is now no certainty regarding other products.

Market Report

Staple Food Group can source  a wide variety of products including:

Butters, milks, concentrated milk, milk powders, infant and toddler nutrition, dairy drinks, yoghurts, desserts, cream, coffee enrichers, cheese and cheese alternatives.

Wheelbarrow Butter will be changing to Frico Butter which has become FrieslandCampina’s world wide brand for their new range of butter.

What ’s the difference between WHEELBARROW and FRICO Dutch Butter? ABSOLUTELY NOTHING.

A world wide brand means consumers will become aware of the Frico  brand when they visit other countries and will recognise the brand on the UK retailers shelves

and even better there will be a complete range introduced over the next year as detailed below.

So the long established pedigree and the very loyal client base will continue. Frico/Wheelbarrow reputation has been built on the delicious pure natural taste. Frico/Wheelbarrow Butter is ideal for cooking, baking and spreading. Available to Major Multiples, Foodservice and Cash and Carry.

Product Range includes:

Frico/Wheelbarrow easier spreading Butter is produced in Holland. Frico/Wheelbarrow has the delicious creamy taste of pure natural butter and contains no artificial additives.

Frico: 1kg, 250gm blocks salted and unsalted

Frico Frying Butter 250gm block (available soon)

Frico: Tubs 225gm salted and unsalted

Frico: Cups (portions) 10gm

Packaging

Salted and Unsalted 250gm – 16 x 250g – 15 x 16 cases (180 boxes  per pallet)