Where will SMP prices land in 2023?

In a global dairy market that has been short of milk for some 16 months now, the key question going forward is where SMP prices will find their new price range when milk production starts to grow again. Will we return to the average price range of the pre-pandemic years or have some of the price and cost drivers in supply trade and demand changed in a fundamental way.

Just to mention a few of these fundamental price drivers:

some of the key SMP production regions are facing sustainability limitations
to some extent the surplus role of SMP/butter may be shared with Mozzarella
has China’s import demand portfolio changed in 2022?
will the cost of drying milk and transportation return to a new normal?

In this article Dairyntel will be looking at some of the longer term trends in the SMP market and how these might translate into a new balanced price level going forward.

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