New Dairy Trade Opportunities and Strong Production Mark a Dynamic October
Source: DairyNews.today
October was a dynamic month for the dairy industry, reports Cristina Alvarado, commercial manager of data and insights at NZX.
Throughout October, the industry saw significant developments in production, trade, and market events. Highlights included NZX’s joint hosting of the SGX-NZX Global Dairy Seminar in Singapore, a gathering that brought together industry leaders to share insights, strengthen client connections, and explore emerging opportunities in the dairy sector.
Milk production in New Zealand remained robust. September posted a 5.2% year-on-year (YoY) increase in milk solids, closely aligning with NZX’s 5.4% forecast. In tonnage, this represents a 4.1% YoY increase to 2.6 million tonnes—the highest September figure since 2020. October projections indicate a further 3.6% YoY rise, aligning with peak season, with incremental growth expected through December before tapering in early 2025.
On the global stage, the United States recorded a slight 0.1% YoY increase in September milk production, while Australia saw a 1.4% rise. Europe, however, reported a -1.0% decrease in August production, and South American producers, including Argentina and Uruguay, reported YoY declines of -1.9% and -1.0%, respectively.
These variations in supply have impacted product availability, especially in Europe, where butter production has faced constraints. The resulting supply-demand shifts were evident in mixed outcomes at Global Dairy Trade (GDT) events in October. Event 365 saw the GDT Price Index rise by 1.2%, primarily driven by a 3.0% increase in whole milk powder prices. Event 366, however, experienced a slight decline of -0.3%, with skim milk powder prices falling by -1.8%.
New Zealand’s dairy exports showed strong September performance, with YoY volume growth of 2.7% and a significant 12.7% rise in export value due to elevated global dairy prices. Anhydrous milk fat (AMF) exports were particularly strong, surging by 37% YoY. Global regions also showed export growth, with the US, Europe, Australia, and Argentina each reporting YoY increases in dairy exports, while China’s imports fell by -8.9%.
As the demand for dairy continues to rise in Southeast Asia and the Middle East, the outlook remains promising for New Zealand dairy, especially following recent trade agreements. The conclusion of trade negotiations with the UAE in September, followed by an agreement with the Gulf Cooperation Council (GCC) in October, is expected to strengthen trade channels, particularly as the GCC is New Zealand’s second-largest dairy market after China.
Looking ahead, potential constraints remain a factor, with industry players closely monitoring developments like avian flu and heifer availability in the US, along with the blue tongue virus and weather impacts in Europe.
While global production faces some challenges, the overall outlook for New Zealand dairy remains positive. By capitalizing on emerging trade opportunities and adapting to evolving market conditions, the industry is well-positioned to navigate the months ahead successfully.
Milk production in New Zealand remained robust. September posted a 5.2% year-on-year (YoY) increase in milk solids, closely aligning with NZX’s 5.4% forecast. In tonnage, this represents a 4.1% YoY increase to 2.6 million tonnes—the highest September figure since 2020. October projections indicate a further 3.6% YoY rise, aligning with peak season, with incremental growth expected through December before tapering in early 2025.
On the global stage, the United States recorded a slight 0.1% YoY increase in September milk production, while Australia saw a 1.4% rise. Europe, however, reported a -1.0% decrease in August production, and South American producers, including Argentina and Uruguay, reported YoY declines of -1.9% and -1.0%, respectively.
These variations in supply have impacted product availability, especially in Europe, where butter production has faced constraints. The resulting supply-demand shifts were evident in mixed outcomes at Global Dairy Trade (GDT) events in October. Event 365 saw the GDT Price Index rise by 1.2%, primarily driven by a 3.0% increase in whole milk powder prices. Event 366, however, experienced a slight decline of -0.3%, with skim milk powder prices falling by -1.8%.
New Zealand’s dairy exports showed strong September performance, with YoY volume growth of 2.7% and a significant 12.7% rise in export value due to elevated global dairy prices. Anhydrous milk fat (AMF) exports were particularly strong, surging by 37% YoY. Global regions also showed export growth, with the US, Europe, Australia, and Argentina each reporting YoY increases in dairy exports, while China’s imports fell by -8.9%.
As the demand for dairy continues to rise in Southeast Asia and the Middle East, the outlook remains promising for New Zealand dairy, especially following recent trade agreements. The conclusion of trade negotiations with the UAE in September, followed by an agreement with the Gulf Cooperation Council (GCC) in October, is expected to strengthen trade channels, particularly as the GCC is New Zealand’s second-largest dairy market after China.
Looking ahead, potential constraints remain a factor, with industry players closely monitoring developments like avian flu and heifer availability in the US, along with the blue tongue virus and weather impacts in Europe.
While global production faces some challenges, the overall outlook for New Zealand dairy remains positive. By capitalizing on emerging trade opportunities and adapting to evolving market conditions, the industry is well-positioned to navigate the months ahead successfully.
