Food & Climate
The Food and Agriculture Organization of the United Nations (FAO) Dairy Price Index rose in August, driven by a surge in import demand for spot supplies, while international butter price reached an all-time high fueled by increased uncertainty over the adequacy of milk supplies in Western Europe, which flooded by bluetongue disease.
The index increased 2.2 percent. International cheese prices also climbed due to higher global import demand, according FAO report today which “Food & Climate” platform received a copy from.
The market price butter price has reached record highs, which will eventually trickle down to consumers, said DCA Market Intelligence. The cause is an outbreak of bluetongue disease among cattle and sheep in western Europe, according to “VRT news”.
Bluetongue disease and butter price
The outbreak of bluetongue in cattle and sheep in Belgium and neighbouring countries has caused the butter price to skyrocket.
A metric ton of butter was more than €7,900 in Europe at the end of August, smashing the previous record of €7,400 set in 2022 when Russia invaded Ukraine.
While the butter price in the supermarket has remained stable so far, it will not stay that way, according to DCA Market Intelligence, an agency that monitors agricultural supply and pricing in the Netherlands and Flanders. “With the demand for butter in the period leading up to Christmas, we haven’t reached the top price yet,” said the agency.
It’s too early yet to say whether other milk products will see significant price increases, but bluetongue does cause cows and sheep to produce less milk. In Flanders, nearly 550 cattle and sheep farmers have reported at least one infection of the bluetongue virus. Across Belgium the number is 874.
The virus first appeared at the end of July, having originated in the Netherlands. Now Germany, France, the UK, Luxembourg and Denmark have all reported cases of the disease.
While the benchmark for world food commodity prices declined marginally in August, as decreases in quotations for sugar, meat and cereals outweighed increases in those for vegetable oils and dairy products.
Bluetongue is a viral infection spread by midges. It mostly affects the production of milk but can also be deadly to ruminant species, particularly sheep. The virus does not spread to humans, so there is no danger in consuming dairy products, the Federal Agency for the Safety of the Food Chain confirms.
Vaccines are available against bluetongue disease. The Flemish Sheep Farmers group has asked the government to reimburse the costs of vaccination, but the federal minister of agriculture, David Clarinval (MR), said there is no plan to do so.
The milk and butter market has experienced robust growth in recent years, expanding from $321.08 billion in 2023 to $339.65 billion in 2024 at a compound annual growth rate (CAGR) of 5.8%. The growth in the historic period can be attributed to dairy farming, basic nutritional staples, dairy industry growth, traditional culinary use, global trade.
The milk and butter market is projected to continue its strong growth, reaching $416.08 billion in 2028, according “Newswires”.
World food commodity prices
The FAO Food Price Index, which tracks monthly changes in the international prices of a set of globally-traded food commodities, averaged 120.7 points in August, slightly down from its revised July figure and 1.1 percent below its corresponding value in August 2023.
The FAO Cereal Price Index dropped by 0.5 percent from July, driven by lower global wheat export prices amid competitively priced Black Sea supplies and higher-than-expected production in Argentina and the United States of America.
Meantime, world maize prices firmed slightly, reflecting the impact of heatwaves on yields in parts of Europe and North America, while the FAO All-Rice Price Index increased by 0.6 percent, as quotations for non-Indica varieties increased under the influence of seasonal tightness and currency appreciations of some exporting countries against the United States dollar.
The FAO Vegetable Oil Price Index rose by 0.8 percent from July to reach a 20-month high, as increases in international palm oil prices more than offset declining quotations for soy, sunflower and rapeseed oils.
The FAO Meat Price Index declined by 0.7 percent from July, with poultry, pig, and ovine meat prices all down amid lackluster import demand, even as world bovine meat prices increased slightly.
The FAO Sugar price index declined by 4.7 percent in August to reach its lowest level since October 2022. The drop was underpinned by an improved production outlook for the upcoming sugarcane harvests in India and Thailand, as well as lower international crude oil prices. However, concerns about the impact of fires on sugarcane fields in key growing areas of Brazil led to sharp sugar price increases in late August.
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