COMMODITIES OUTLOOK A hard hit Ice cream makers are feeling the effects of slowed milk production. by Nate Donnay | Nate.Donnay@stonex.com I ce cream is a follower. More specifically, the price of the milk that goes into ice cream is driven by the price of butter and nonfat dry milk (NFDM); it isn't tied directly to the supply and demand for ice cream. The price of butter and nonfat dry milk have both rallied to multi-year highs in January, driven by both domestic and global fundamentals, and that will be feeding through to higher input costs for ice cream makers. There are ways to hedge those input costs 58 JAN-FEB 2022 | DAIRYPROCESSING.COM and reduce the volatility, but first let's walk through what is driving the current market. Milk production growth slowed across the major dairy exporting regions during the second half of 2021 with volumes dropping below the previous year in the United States, EU-27+UK, New Zealand and Australia during the fourth quarter. High feed costs, a tough time finding labor, escalating operating costs, adverse weather in some places ©asayenka - stock.adobe.comhttp://www.DAIRYPROCESSING.COM