Category Intelligence on Dried Whey Powder covers the following
Complexity of dairy market is high, due to standardization and multiple (38) co-products. Separation process produces a skim cream portion that is usually 40 percent fat. This cream portion is used in the dairy fats production process. Whey, a by product of cheese and casein manufacturing process, is further processed to produce generic and high value derivatives
WPI at greater than 90 percent protein and WPC with protein levels ranging from 34 percent to 90 percent are the most functional niche product ranges among all whey ingredients. While DWP, Permeate, and SWP are more generic in nature.
Evaporation and filtration play a vital role in the process, due to the presence of high water content in whey (94%). Initial composition of whey depends on cheese type. Along the process, whey products' compositions are subjected to changes, based on treatment methods.
Functionality and value of whey products improve with concentration levels. Sweet whey powder at bottom of the pyramid is more commoditized, hence, experiences highly volatility in prices, majorly driven by US, EU and NZ trade trends.
Sourcing Recommendation For buyer
Whey powder is a commoditized product with presence in both spot and financial markets (CME futures and EU futures market). Major buyers in the US and EU adopt a mixed procurement strategy by procuring partially from suppliers and the rest through commodity futures market. Buyer can adopt suitable hedging strategies to make more cost savings.
Global net supply was around 0.1 MMT (Undersupplied) in 2016, where ~90% of total supply is from EU and the US. Global production is growing ahead at a CAGR of 1.8%, closely followed by a demand growth at 1.73%. Future outlook of whey market would be balanced or remain undersupplied, largely depends on secondary derivatives' market.
Gross Domestic Product
Consumer Price Index - Inflation
Crude Oil Price
As US implements TPP:
Suppliers' preference to shift from whey powder production to secondary derivatives production is evident with the 5% decline in dry whey production during 2010–2016, which has been channelized to lactose production. Increasing number of plants for lactose and WPI production also substantiate the same.