Milk in key exporting regions
%-change versus previous year
Europe
Local liquids market still feels overall weak, but demand for skimmed solids is good
Flush dynamics characterize the EU liquids market. Butter and SMP prices translate into a milk price of around EUR 0.33, which is a situation one would normally only expect in April and May. Spot milk is priced around EUR 0.30 in Belgium, the Netherlands and Germany. Prices in France are 10% higher at around EUR 0.33 due to good demand for French spot milk in Southern EU. Cream prices - which are at EUR 5.80 currently - seem to be tumbling after German retail demand for butter was fulfilled. Good skimmed solids demand for ice cream and yoghurts on the other hand is pulling prices up to a level of EUR 1.30.
Americas
Exports need to increase further in order to relieve the local market balance
US dairy farmers are still generally doing well. The US-China agreement on soybean imports may reduce the US soybean surplus - which could subsequently drive prices somewhat higher - but it will not materially change the still favorable input cost situation. What’s more critical is that US dairy exports will have to increase further in order to sustain the local market balance and prevent milk prices from falling to levels where they start to hurt. Recent data are obviously lacking but milk supply growth is expected to remain at 2-3%, which is much more than what’s needed to balance the local market.
Asia-Pacific
Milk production continues to remain favorable in New Zealand
The Oceania season continues to unfold favorably for most farmers. Physical soil conditions are good and prices at GDT do not give enough arguments to change the seasonal milk price outlook from its current high level. Australia supply continues to hover a few percent below last year, which adds fuel to the fire of companies competing for milk. NZ milk production on the other hand is expected to sustain its higher output levels throughout the current peak period.
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