What are the facts about fat?
Wednesday 5 July, Peder Tuborgh undertook a series of broadcast interviews in London where he discussed the resurgence of the Global dairy industry and Arla's vision for the future of dairy. It is great to see that Arla is of interest to such significant global media outlets as the BBC and Bloomberg, and that we are in a position to be able to communicate our key messages on our industry, innovation and our special farmer-owned status, on the global stage.
Below please find a link to the BBC interview (please note the BBC video is strictly for internal viewing only and must not be downloaded. The video is not available on mobile phones.)
Peder's appearance on the BBC has not only generated broadcast coverage but has been amplified across online and print titles including The Times and The Telegraph in the UK as well as Sweden, Denmark and Germany. One of the more specific topics which came up was that of a Global Butter shortage and it is this that has been the main focus within much of the subsequent coverage.
So, what are the facts about milk fat?
There is a growing industry-wide shortage of milk fat across Europe, which is now generally affecting industry prices. This is due to a growing consumer demand for butter over a longer period of time while many dairy manufacturers have placed more milk in cheese production because the cheese category has yielded better returns in a time with low milk prices.
While Arla cannot comment on any specific price negotiations with our customers, we can in general terms confirm that there is a clear upward development in industry prices on milk fat and consequently on butter and spreadable products on the European and global markets. In a situation like this where butter supply continues to get more and more scarce, Arla will aim to prioritise our long-term retail and food service customers and our strategic brands – such as Lurpak®, Anchor®, Arla Kærgården® and others.
We do expect the high demand for butter to continue throughout the year, potentially creating a shortage of butter products in parts of the European food and dairy industry but it is important to note that there will still be butter available.
While European milk production is slowly beginning to increase again, our most optimistic forecasts show that total production in 2017 will only be on par with the lower volumes produced in 2016. So even though production is increasing, it is not expected to significantly change the imbalance in supply and demand in time to impact butter production for the holiday season.
Some of the media coverage