Milk in key
exporting regions
“Other EU” is the change in the aggregated milk production volume of all other EU member states except for the ones displayed individually in this graph. The individual countries displayed usually have finalised figures for the most recent months, but the other EU category inevitably has a higher degree of estimation.
Volume change versus previous year
Europe
Still more milk than expected
The EU still reports more milk than last year around this time. The UK is the weak outlier in Europe but most EU member states report milk volumes above last year's September volumes. The recent milk price increases obviously help in that respect as it sustains the investment appetite amongst farmers. Pay out prices are approaching EUR 0.45/kg again and spot prices are hardly lower. Cream remains too expensive for butter production at a price of EUR 4.50/kg. SMC trades at EUR 3.30/kg currently. The first couple of deals for Q1 are also at levels above EUR 3/kg, which indicates that the protein market is expected to remain tight.
Americas
Cream prices remain stable but with a bearish outlook as milk production and proteins go from strength to strength
Most local US analysts see no reason why US milk production would weaken going forward. Investments in rotaries and barn equipment in general remain strong, most of the recent processing capacity expansions still have headroom and local demand is robust, particularly for skimmed solids. Milk prices are not spectacular, but beef returns and energy income supplement the farmer cash flows. The cream market is probably the only challenge as forceful milk production combined with booming demand for skimmed solids inevitably yields a lot of cream. Cream prices are about USD 1.33/lb in the Mid-West in a stable market and USD 1.18-1.20/lb in a weaker market in the West.
Asia-Pacific
Good start of the season in New Zealand
Local sources remain careful about the outlook for milk production later in the season but according to August milk production data and GDT volumes on offer for sessions to come, New Zealand is on track for a strong start of the season. August milk production in New Zealand was more than 2% above last year's already strong kick off. Australia appears to get somewhat dry at the moment, but altogether there is very little doubt about the need for a strong export performance out of the region in the run op to peak production.
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