218th Edition of Foodcom DAIRY Newsletter

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Welcome back to our Newsletter!

Read the latest edition of our dairy market newsletter! In this issue, we analyze current trends and prices for key dairy products, highlighting recent price increases at the Global Dairy Trade (GDT) event. We discuss the stability of prices for milk powder and cheeses, such as Gouda and Edam, and the rise in butter prices. We will also present optimistic milk price forecasts for the 2025 season, which draws a promising future for the industry, both locally and globally.

Let’s take a look at what else is happening in the dairy market!

Hottest products of the week

Skimmed Milk Powder

There is stability in the market for Skimmed Milk Powder (SMP) in both feed and food applications. There have been no significant price changes in the past week, staying within a price range of around 2150 EUR/MT for feed and between 2250 and 2350 EUR/MT for food applications, respectively. This price stability is beneficial to producers and buyers, allowing them to plan and operate predictably without having to adjust to significant market fluctuations.

Cheese

The cheese market, including Cheddar, Gouda, Edam and Mozzarella, maintains price stability. This market equilibrium is favorable for planning, although it may be perceived by retailers as not very dynamic. Nonetheless, recent Global Dairy Trade quotations have shown an increase in prices, which may suggest upcoming changes in the market.

Fats

Butter prices in Europe have risen slightly recently, now approaching the 6000 EUR/MT level. The increase is due to continued increased demand for fresh products.

Prices for related products, such as butter oil and AMF, remain unchanged significantly.

Liquids

Cream prices have risen for another week in a row and are now in the range of 6700 to 7100 EUR/MT. The continuing good weather is boosting demand for fresh produce, which is activating purchases by end customers.

Prices for Skimmed Concentrate (SMC) are on the rise. Currently, in Europe, they range from 1500 to 1600 EUR/MT.

Currently, milk prices on the European market remain stable. In Ireland, a year-on-year decline in milk production of about 15% can be observed, which affects milk availability. A similar phenomenon applies to Germany, where declines are also recorded. It is also worth noting that in some European countries the seasonal peak in milk production has occurred faster than expected.

Whey powders

No changes have been observed in the last week in the prices of Skimmed Whey Powder for feed in the European Union. Prices remain stable, oscillating between 635 and 645 EUR/MT.

Similarly, prices for Sweet Whey Concentrate also remain stable, with transactions taking place in the 300-400 EUR/MT price range.

What else?

Oceania

Dairy farmers are set for a promising season ahead as analysts predict a robust farmgate milk price for the 2025 season, with forecasts ranging from $8.35 to $8.50. This optimism stems from a recovery in Global Dairy Trade prices and a stable supply-demand balance. Despite challenges like higher input costs, including fuel and fertilizer, experts anticipate prices to remain above the 10-year average of $7. Furthermore, recent GDT auction results have exceeded expectations, bolstering confidence in the market. Fonterra’s forthcoming forecast, due on May 30, will provide further insight into the season ahead, shaping expectations for dairy producers worldwide.

North America

Concerns over the decline of family farms and the rise of mega-dairies prompt calls for action in New Mexico. Advocates argue for a moratorium on corporate farming to protect the state’s heritage of responsible agriculture and land stewardship. Communities impacted by factory farms highlight environmental and social concerns, emphasizing the need to preserve local farming traditions.

As dairy producers grapple with lower Class III prices and heightened financial strain, many are turning to the Dairy Revenue Protection (Dairy-RP) program in 2024 to stabilize their incomes. Managed by the USDA’s Risk Management Agency, Dairy-RP offers producers a comprehensive risk mitigation solution tailored to their specific needs. With up to 95% of expected quarterly revenue covered, the program aims to foster financial stability within the industry and reduce barriers to risk management. By providing personalized advice and support, Dairy-RP enhances its effectiveness in addressing the challenges faced by dairy operations. As the industry evolves, innovative risk management tools like Dairy-RP become essential for dairy operations to remain competitive in the face of market volatility.