Milk in key exporting regions
%-change versus previous year
Europe
Spot milk prices move closer to farmer milk prices
In some EU countries milk production growth rates are finally dropping towards zero or lower and demand in the South of the EU is improving due to the upcoming holiday season. Both developments cause spot milk prices to increase throughout the EU. In Germany spot milk is trading just above EUR 0.30 and in France just below that mark. The Netherlands and Belgium remain considerably behind at price levels of EUR 0.22 as supply pressure is still present in both countries. Even at the higher spot prices in France and Germany commodity production is a favorable option as SMP/butter yields a milk price of EUR 0.36-0.39. Cream prices are mostly range bound between EUR 3.90-4.20/kg with the potential to move slightly lower in weeks to come. SMC is stable at EUR 1.65-1.75 ex works. Based on SMP price momentum one would expect upward price potential for skimmed solids but it has not materialized yet.
Americas
US milk production growth remains impressively high
US milk production growth remains impressive with a growth rate of 2.7% in April. Milk prices are still just good enough to hang on to the current herd sizes. Beef returns are supportive, the cost of feed is still favorably low and other inputs are only moderately affected by the geopolitical turmoil. Probably the only concern comes from the recent discovery of a screwworm case in Texas, but it is too early to do any assessment on the potential impact on dairy cows and milk production down the road.
Asia-Pacific
The shoulder of the Oceania season is very strong
Milk production in both Australia and New Zealand is very strong in the shoulder of the season with April growth rates reaching 4% and 6% respectively. Volumes are inevitably winding down this time of the year and market participants are already making assumptions about the start of the new season in August/September. Financially everything looks very solid and favorable from a farmer’s point of view.
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