The daily spot markets are not finding bottom. This is becoming an increasing concern as demand has not been able to generate aggressive buyer interest. Commercial disappearance of dairy products in 2024 ran about a half percent below 2023 and remains that way for the beginning of the year. One half of a percent does not seem like much, but it is quite a bit in the dairy industry.
Not only are the butter and cheese prices seeing weakness, but the dry whey and nonfat dry milk prices continue to decline. Grade A nonfat dry milk is at the lowest price since August 9, 2024. Dry whey is at the lowest price since July 17, 2024. These products have had a substantial impact on the price calculation for Class III and Class IV futures.
The uncertainty of the impact of tariffs on Canada and Mexico, along with an increase of tariffs on China, continues to cast a bearish cloud over the market. It is uncertain whether this may reduce dairy exports to these countries or whether they will reciprocate by imposing tariffs on dairy products. Any negative impact on dairy demand from these or other countries would not be positive to prices. Prices are lower due to buyers being unwilling to increase purchases at lower prices to build inventory for demand that may not materialize. We can only hope dairy demand does not suffer from these tariffs as these countries may continue importing dairy products for their consumers.
If this is not enough to create uncertainty over demand, Boston-based startup Brown Foods is going to debut a product named “UnReal Milk”. It is the world’s first lab-grown milk produced with a cow. According to an article in edairynews on February 25th, the first version of UnReal Milk is already undergoing lab validation. Independent testing from the Whitehead Institute for Biomedical Research, affiliated with MIT, confirmed the presence of all essential dairy proteins, making the product structurally identical to traditional milk. Brown Foods has also confirmed that UnReal Milk contains the same milk fats, primarily triglycerides, and carbohydrates found in conventional dairy. According to the company, UnReal milk can be processed into butter, cheese, and ice cream. However, they boast that it will slash carbon emissions by 82% and that it is a cruelty-free alternative to conventional milk.
First of all, milk production is not cruel as farmers take excellent care of their cows, as it is their business and not taking care of cows results in lower milk production and income. As far as slashing carbon emissions by 82% is 82% of what? Is it 82% of what is being produced by milk production currently, or 82% of the carbon produced from everything being produced or manufactured? This is difficult to quantify.
It will be up to the consumer whether this will gain in popularity or if it will remain only a niche market. Consumers will make their decisions depending on how informed they might be, not only on milk alternatives, but also alternative meat and other food products. Needless to say, there will be interesting times ahead.
Your Next Read: Navigating Rough Waters: The U.S. Dairy Industry Amidst Global Trade Tensions
