Canada is far from alone with a milk price increase of more than eight per cent on Feb. 1.
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Canada is far from alone with a milk price increase of more than eight per cent on Feb. 1.

The entire world is facing disruptions, cost increases, faltering production, and soaring milk prices.

Bad weather in New Zealand, the United States and Australia had already combined with rocketing gas prices and pandemic-related supply chain disruptions to put pressure on milk producers in the five biggest exporters before the war.

Combined milk production in New Zealand, which accounts for 35 per cent of global exports, the European Union, Australia, the U.S. and Argentina fell 1.7 per cent in January compared with the previous year, down according to commodity broker StoneX.

New Zealand and Australia posting declines of more than 6 per cent.

After the start of the war on February 24, prices of crucial products have risen further.

Anhydrous milk fat, a core dairy product, hit a record $7,111 a tonne on March 15, according to Global Dairy Trade index, which monitors New Zealand dairy prices.

Whole milk powder, the most actively traded product, hit an eight-year high this month.

New Zealand company Fonterra, the world’s biggest dairy exporter, said last week it was paying farmers 30 per cent more for milk than it did a year ago and predicted the price would rise further.

It cited rising costs for fertilizer and feed and disruptions in supply chains related to ongoing labour shortages because of the COVID-19 pandemic and Russia’s invasion of the Ukraine.

At the midpoint of the year, the all-milk price forecast for 2022 is a whopping $26.20 per hundredweight (cwt), according to the June 2022 USDA/ERS Livestock, Dairy and Poultry Outlook report.

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