- The market for Skimmed Milk Powder remains stable, with feed applications priced around 2150 EUR/MT and food applications between 2250 and 2350 EUR/MT.
- Cheese prices for Gouda and Edam hold steady at 3850-3950 EUR/MT, while butter prices have recently risen, approaching 6000 EUR/MT in Europe.
- Dairy farmers in Oceania anticipate a promising 2025 season with farmgate milk prices expected to range from 8.35 to 8.50 USD, reflecting a recovery in Global Dairy Trade prices and a stable market balance.
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The dairy market is experiencing substantial price increases across the board, driven by strong demand and tight supply chains. Skimmed Milk Powder (SMP), Cheeses, Butter, and Cream are all seeing sharp price rises. This trend reflects robust market dynamics and seasonal influences, highlighting the growing importance of strategic planning to capitalize on these market conditions.
Let’s take a look at what else is happening in the dairy market!
Hottest products of the week
Skimmed Milk Powder
The price of Skimmed Milk Powder (SMP) for feed has risen sharply. Last week there were notable trades at a much higher level. For Q3 trades at €2400 EUR/MT were recorded, while for Q4 trades above €2500/MT were concluded. These figures indicate a clear upward trend in SMP prices.
The market for food-grade skimmed milk powder (SMP) has also seen an increase in prices. Spot deals and Q3 transactions are still being transacted at prices around €2400/MT FCA or below, although such offers are becoming increasingly rare. Most spot offers now start around €2450/MT, with Q4 futures above €2650/MT, reflecting growing market pressure.
Cheese
Cheese prices are rising, mirroring the trend for other dairy products. Gouda is currently trading at and above € 3900/MT, Mozzarella at and above € 3750/MT (with Q3 prices observed around € 3850/MT), and Cheddar at and above € 4000/MT. We are also seeing increasing demand and rising prices for Cagliata. This broad-based increase for all types of cheese illustrates the strong market dynamics and rising production costs. Additionally, we anticipate further price increases.
Fats
There have been significant price increases on the butter market, with prices reaching and exceeding €6400/MT. In the 3rd quarter, transactions were recorded at around 6500-6550 €/MT. One factor contributing to the increase in butter prices is the continued rise in cream prices over the past few weeks.
This upward trend indicates a tight market with robust demand.
Liquids
Cream prices have surged sharply, currently quoted at €7300-€7400/MT, with further increases expected. This rise is partly driven by seasonal demand, notably the fresh fruits and vegetables season, which traditionally boosts cream consumption. We expect prices to continue rising in the coming weeks.
Prices for Skimmed Concentrate (SMC) have increased significantly, now ranging between €2100 and €2200/MT FCA. The era of cheap skimmed milk concentrate appears to be over, as demand continues to outpace supply. There is a significant problem with availability; it is difficult to find large quantities of SMC, no matter the price.
Spot prices for milk are continuing their upward trend, influenced by the same supply and demand dynamics affecting the broader dairy market. This trend highlights the general inflationary pressures within the dairy sector. However, in some European countries, we are already past the peak production season, and milk availability is expected to decrease. Additionally, forecasts predict heatwaves in Central Europe for the coming week, which could further impact milk supply.
Whey powders
The market for Sweet Whey Powder (SWP) for feed has experienced a remarkable upswing. Current prices for May-June are reported to be between €650 and €660 per metric ton (MT). For the fourth quarter, prices are expected to rise to around €850/MT. In addition, the availability of SWP for food is severely limited and producers are starting to increase prices dramatically.
The market for Sweet Whey Concentrate has seen a significant increase. Prices for regular sweet whey concentrate have risen to between €500 and €600/MT, with some challenging volumes trading around €200/MT. This strong price increase indicates a tight supply chain and robust demand.
What else?
Oceania
Fonterra, a major dairy cooperative, has announced a significant strategic shift, indicating potential divestment of its assets in Australia, including factories in Victoria. This move, termed “a step-change in strategic direction,” aims to deepen its position as a leading provider of high-value dairy ingredients. The announcement has raised concerns among suppliers ahead of the annual farmgate price deadline, with stakeholders seeking clarity on the future of the dairy industry and the fate of farmers, workers, and local communities. Australian Dairy Farmers president Ben Bennett emphasized the need for transparency and expressed hopes for a sustainable, preferably Australian, solution amidst uncertainties about the sale’s impact.
North America
The recent avian influenza outbreak has sparked a surge in raw milk sales, reigniting the age-old debate over pasteurization. Despite FDA reassurances about pasteurization’s effectiveness in preventing avian flu transmission, interest in raw milk has risen, fueled by skepticism toward public health agencies. Advocates like Mark McAffee of the Raw Milk Institute argue for the safety of rigorously tested raw milk, emphasizing stringent farm practices. However, researchers like Kerry Kaylegian warn of potential risks and advocate for caution. The debate extends beyond health concerns, touching on cultural differences in food traditions and regulatory agency trust. European perspectives, more open to raw milk benefits, contrast with perceived industry influence on U.S. regulations, fueling skepticism.
