Milk in key exporting regions
%-change versus previous year
Europe
The EU liquids market recovers slowly
After the crisis situation during the Christmas period when processing capacity was simply insufficient to process all of the EU’s milk supply, liquid prices recovered somewhat in early January. The gap with processor milk prices remains very wide however. Spot milk is traded at EUR 0.13 in the Netherlands, EUR 0.04 in Northern Germany and EUR 0.05-0.06 in France. Unused capacity in Spain and Italy is pushing Southern German milk prices somewhat higher to levels around EUR 0.08. Strong cream supply generally finds a home at prices of EUR 3.30-3.40. At these revenue levels skimmed solids returns are hardly relevant as the cream already pays for the milk price. All prices are ex works.
Americas
Strong production in California pushes the US above 4% supply growth year-on-year
Market watchers are wondering if there is anything that can stop US milk production going forward apart from disease and adverse weather. Now that California is above 10% growth year-on-year the US is really firing on all cylinders. The side returns in beef and energy allow large farms in particular to keep the herds at maximum capacity and the favorably low feed prices also boost cow productivity.
Asia-Pacific
Less supply pressure in Oceania compared to other markets
The milk supply graph shows that Australia is the only country that we monitor for this report where milk production has been consistently below last year’s levels in the past few months. However, New Zealand’s weight still puts the Oceania supply balance in positive territory. The overall APAC market balance still feels somewhat tighter than other major markets. Last week’s GDT results also underline this. Less supply pressure in combination with the preference of buyers in the APAC region for Oceania product suggest a firmer market balance in this part of the world.
More insights
If you're interested in Milk, you may also like these topics:
