The milk powder shortage in the United States continues

 

 

First, the production of skim milk powder (SMP) decreased by 24.
5% year-on-year, resulting in a decrease in the production of infant formula with skim milk powder as the main raw material, insufficient self-sufficiency, and dependence on imports
.

 

Second, due to the impact of the new crown epidemic, the domestic supply chain of infant formula is not smooth, and problems such as difficulties in purchasing key raw materials, labor shortages and product disassembly interruptions are widespread
.
At the same time, the epidemic has also changed people's consumption habits, making them tend to stock up on goods before consuming
.
At the beginning of the epidemic, people hoarded milk powder in large quantities, and manufacturers increased production, but as production expanded, the market became saturated, and manufacturers reduced production
.
The milk supply is cyclical, and the cycle from replenishment to lactation of cows is more than 2 years, and the lagging milk supply is difficult to adapt to the fluctuating demand for milk powder, resulting in a shortage
of milk powder at this stage.

 

Third, Abbott, the largest milk powder manufacturer in the United States, closed its factory due to safety issues, which aggravated the tightness of milk powder supply, which also became the fuse for the outbreak of the "milk powder crisis" in the United States
.
According to the Wall Street Journal, the biggest impact of the "milk powder crisis" is mainly grassroots people with an annual income of less than $75,000, of which 40% of families have difficulty
buying milk powder.

 

In response to the "milk powder crisis", the United States has taken the following two measures
.
First, under the regulatory measures of the US Food and Drug Administration (FDA), Abbott restarted the factory in question
.
Second, the FDA simplified the review process for imported milk powder, relaxed access, and imported a large number of overseas milk powder
.
However, it is reported that Abbott milk powder still has the risk of deterioration, Abbott announced the recall of some problem goods on October 14, local time, and the "milk powder crisis" in the United States still exists
.

 

Declining dairy cattle stocks and rising costs drove up U.
S.
milk prices

 

According to the annual report on live cattle inventory in the United States and the latest data from CLAL, as of January 1, 2022, the number of live cattle in the United States fell to a five-year low, of which 9.
38 million dairy cows, down 0.
7%
year-on-year.
As of August 2022, U.
S.
milk production fell 0.
3% year-on-year, and milk prices increased 62.
2%
year-on-year.
The decrease in milk production and the increase in milk prices were mainly affected
by feed prices.
The dairy farming model in the United States is dominated by house feeding, with large amounts of concentrate feed with corn and soybean meal as the main raw materials, and as of October 2022, US corn and soybean prices are forecast to increase by 38.
3% and 27.
1%
year-on-year, respectively.
Feed prices have risen and costs have shifted to consumption, raising milk prices
.
At the same time, the pressure of rising costs has inhibited the enthusiasm of dairy farmers to expand production, and the number of dairy cows has not increased, but has declined
.
In addition, the previous statistics showed that California has 1.
672 million cows, the largest number of dairy cows in the state, and more than 97% of California is currently in severe drought, and the continuous severe drought has reduced the quality of pasture, further affecting milk production
.

 

 

 

 

 

 

 

Dairy production, especially skimmed milk powder, fell significantly

 

As of August 2022, among the main dairy products, in addition to cheese production, which increased by 1.
9% year-on-year, the production of butter and various types of milk powder decreased and imports increased
.
Among them, butter production decreased by 2.
2% year-on-year, and imports increased by 11.
9%
year-on-year.
However, according to CLAL data, US butter exports will increase by 48.
7% year-on-year in 2022, and the self-sufficiency rate
of butter will be guaranteed by more than 110% from 2018 to 2021.

 

 

 

 

 

 

 

 

 

As of August 2022, the output of skim milk powder (SMP) decreased by 24.
5% year-on-year, and the import volume increased by 53.
1% year-on-year; Skimmed milk powder (NDM) production decreased by 3.
1%
year-on-year.
Milk powder production is reduced or affected by energy prices, and the processing of whole or skimmed milk powder requires a high temperature environment and large energy consumption
.
Affected by inflation and the Russia-Ukraine conflict, world energy prices will rise in 2022, and dairy processors will be forced to reduce milk powder production
due to rising cost pressures.
According to reports, some dairy processors turned to produce cheese with lower energy consumption, resulting in a 1.
9% year-on-year increase in cheese production, a 13.
4% increase in exports, and a decrease
in milk powder production.

 

As of August 2022, except for the main dairy products, the import and export volume of other dairy products has basically increased, and the international trade situation is improving
.
Among them, condensed milk imports increased by 79.
4% year-on-year, and exports increased by 42.
8% year-on-year; Casein imports increased by 25.
7% year-on-year, and exports increased by 31.
9% year-on-year; Cream imports increased by 36% year-on-year, and exports increased by 14.
8%
year-on-year.

 

Overall, the import growth rate of US dairy products from January to August 2022 basically exceeded the export growth rate, and the endogenous demand in the US market was large, and the development prospects of the dairy industry were good
.
At present, the problems that the United States urgently needs to solve are: the supply chain of dairy products under the epidemic is not smooth, the supply and price of many types of dairy products are too high, and the people's consumer satisfaction is low
.