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Will American cheese be consumed more in Europe?

According to Bloomberg, Europe is facing problems with its milk supply. Basic element for dairy products, obviously cheese. The solution of the European countries thus remaining the cheese from the imports, American.

In the Netherlands, for example, official data show that cheese imports from the US have exploded.

One of the main reasons for these imports is the very low price of US cheese, according to analyst Mary Keough Ledman of Radobank.

The price of cheese production has risen in almost all over the world, but this increase has been felt most severely in Europe.

Drought, then the invasion of Ukraine by Russia raised corn prices, which led to rising feed prices. Also due to the war, energy prices have risen and in addition labor and equipment have risen in price.

All these market factors combined resulted in a decrease in milk deliveries. In addition, farmers have also kept production low due to fear of new environmental regulations, says Nate Donnay, director of consulting firm StoneX Group Inc.

Cheese is an already final product. It requires dairy animals, it needs milk, it needs equipment to make cheese, and so on. These each have a separate cost. The market has further divided the work, making each one important and thus having its own market, which further has certain relationships with other markets and in this way these interdependencies between the raw objects for making an object take place. Thus there is an explanation for this whole financial phenomenon which has implications even for the typical consumer.

All this information comes from the European sphere. On the American side, the story sounds harsher.

Data provided by U.S. The Census Bureau said that Europe imported three times as much cheese as the multiannual average for this month. These data are calculated for February of this year.

Nate Donnay argues, however, that this increase can be interpreted as a speculative free market game.

This view is due to the fact that most of the purchases made in the Netherlands, the new largest buyer of cheese could be the strategy of several trading companies that plan to re-export their products worldwide.

So there is no guarantee that Europeans will consume this cheese in stores.

Moreover, another reason to believe Nate Donnay's opinion is that US cheese exports to Europe are still relatively small. For several years, the United States has exported less than 2,000 tons of cheese a year to Europe, while European Union production is more than 10 million tons a year.

Thus, given all the data presented, the situation for the citizen who supplies himself from the store would still be unclear. The behavior on the market is unnatural, but we will see what new products will appear on the shelf.

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Tags: #usa #europe #trading #netherlands #cheese


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