Dear Dairy,
What an exciting week of "long-lost-friends" finally catching up at Anuga, eh? The first truly global dairy sorority (ahem*) professional trade show, since Covid. I walked in on day one trying not to expect much, but was greeted with a long Covid test queue, which told me, everyone in industry was here to party!?
Joking aside, my assistant had lined up many meetings, and it seemed I had no time to sit for even a moment… Some were not happy with the turnout. Others were thrilled. Using the mean, I think that although the turnout wasn’t spectacular, it also wasn’t horrible. All the key players on the market seemed to be in attendance, and those that weren’t, were likely kicking themselves for not attending.
The big question on everyone’s mind that I was hearing at least, was quite simply - where are we headed and what are the real prices across all categories - butter, cheese, powders… Are we riding the 2018/2019 surge up, or is it just a quick awakening after an extended summer lull. If I was a betting man, I’d venture to suggest that buyers are going to have to come to terms with the new reality, if they haven't already, before they become at risk of losing their jobs. Nothing really seems to indicate to me that prices are due for a correction, at least nothing fundamentally. Milk/cream price is high, inflation is rampant, china isn’t done buying, and resources are only getting tighter. Some “experts” at the show mentioned we are far from any peak anytime soon. Although that might seem like a gigantic reach, nothing would surprise me in this market. And I’m only closing positions back-to-back either way, whatever happens, liquidity is a friend if you have none …
Covid has created anomalies directly & indirectly in buyer purchasing patters, global logistics issues, and political decision making seems like fallacy. With all these different factors at play, anyone that tells you they have an algorithm or magical formula and answer, is trying to take you for a fool, or at least just trying to pay their own bills.
That being said, as I’m riding this train back to Poland, I thought its a good time as any to get your opinions. It seems that numbers don’t lie - statistically, and funnily enough, this poll has accurately predicted the next GDT results, more than 80% of the time. So ofcourse, I want to know again, what do all of you think...