International Dairy Markets See Varied Trends Amid Seasonal Changes and Economic Pressures - USDA
WEST EUROPE:
Despite a generally higher EU milk output compared to the previous year, weekly milk collections are seasonally decreasing as summer heat sets in. This reduction in milk volumes has led to a tightening cream supply, pushing cream prices higher as demand increases for fresh market products. The weighted average price for EU 27 farmgate milk has hovered around 46 euros per 100 kg for much of the first half of the year, with current weekly spot prices in the upper 50 euros per 100 kg range. However, the continent is seeing lower numbers of dairy cows and tight supplies of replacement heifers, which may limit further growth in milk output.
EAST EUROPE:
Milk production in East Europe continues its year-over-year growth, even as seasonal output slows. Lower feed costs and stable milk pay prices have bolstered farm financials, allowing for expanded production. In Poland, the May farm milk pay price was 46.34 euros per 100 kg, slightly above the EU 27 average of 45.90 euros per 100 kg.
AUSTRALIA:
Australian dairy farmers are facing a challenging season as farmgate milk prices for 2024-2025 were cut by approximately 15 percent due to increasing competition from imported dairy products. Rising input costs have added pressure on dairy producers, potentially driving more farmers out of the market. Lower-priced imported butter and cheese are also negatively impacting domestic sales.
NEW ZEALAND:
Recent data from New Zealand shows a 1.1 percent decline in milk production for June 2024 compared to the previous year. Additionally, export values for milk powder, butter, and cheese fell by 10 percent in June 2024 compared to June 2023. However, forecasts indicate that milk solids production may increase from August through October 2024, despite a slight decline expected in July.
SOUTH AMERICA:
Seasonal increases in milk production have yet to materialize in South America, though favorable weather conditions are expected to boost production soon. In Argentina, the USDA Foreign Agriculture Service projects a corn production decline of 2 million tons for the 2024/2025 marketing year, which could impact feed availability. The Argentine dairy industry is also grappling with inflation and currency devaluation, leading to a 7 percent expected decrease in milk production for 2024 compared to 2023. Rising dairy product prices are altering consumer purchasing behavior, with a forecasted 7 percent drop in domestic fluid milk consumption.
NATIONAL RETAIL REPORT:
The latest retail ad survey for week 31 shows an 8 percent increase in conventional dairy ads compared to the previous week, while organic dairy ads surged by 262 percent. Cheese remains the most advertised conventional commodity, despite a 7 percent decline in total ads. Organic milk saw the most significant increase in advertisements, with an 800 percent rise in week 31.
