Milk in key exporting regions
%-change versus previous year
NB: Australia's June number is an estimate as data are lacking
Europe
Market for liquids continues to tighten
Prices in the EU liquids market are gradually moving upwards. Mainly due to seasonally shrinking output volumes, but also due to lower content levels in the milk than last year around this time. Grass quality in Q2 was not sufficient to boost content levels. Demand for liquid milk is particularly strong in Italy due to insufficient local production and consequently high milk price levels. Due to these overall tight conditions the prices for almost all liquids are too high to allow for commodity processing. Suppliers are also hesitant to offer volumes for further out as upward momentum remains intact despite spot milk prices in both Germany and the Netherlands already surpassing the EUR 0.50 level. France still trails a bit behind at EUR 0.45.
Americas
Tight market still fails to push for higher milk price levels
Cash flows in the US are still too close to break-even to allow for bigger herds and subsequently stronger milk output. As weather contracts milk production in California specifically, Class IV product output is affected negatively. The market remains therefore overall tight – especially in butter – but milk prices still fail to inject more confidence amongst dairy farmers. This will inevitably change at some point in the future given the large number of processing capacity investments, but that moment has not come yet.
Asia-Pacific
Early indications point towards an OK start of the new Oceania season
If local market sentiment and sell side behavior provides any indication then we are looking at a solid start of the season in Oceania as processors are pushing ahead with their sales for the first half of the season. However, hard data are not available yet. Weather seems to be overall good although too much rain is always a downside risk in the early months of the season.
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