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.
Note: June 2026 data for Australia have been estimated due to a delay in data availability.
Volume change versus previous year
Europe
Heatwave periods provide interesting insight into relative tightness of fats versus proteins
The volatility in milk output during the recent summer weeks provides interesting insight into the EU market balance in SMC versus the market balance in milkfats. When milk production drops as temperatures reach 30°C or more SMC would increase by EUR 1/kg whereas fat prices would increase by only EUR 0.15/kg. Availability and pricing of spot milk differ strongly between processors. Those that don’t experience pressure will only sell at prices close to their pay-out prices, whereas processors with pressure are still willing to sell at a discount. At cream prices of EUR 4 it still calculates to manufacture butter. SMC at EUR 2.80 remains priced above the equivalent SMP price but both availability and demand are good because powder manufacturers - and even cheese manufacturers at times - are willing to sell their skimmed liquids.
Americas
US milk production is still going strong despite summer heat building up in selected regions
US milk production remains strong judging by another 2.3% increase in June. Exports are strong enough to prevent a scenario of elevated stock levels taking commodity prices down to an equivalent milk price below breakeven. So, nothing seems to be able to prevent US milk output building another 2% on what were already strong milk production numbers last year. It must be said though that the Midwest is suffering from the heat and temperatures on the Westcoast also are heading for levels that may lead to heat stress and lower milk production, but so far it seems like that will be a temporary situation.
Asia-Pacific
Waiting for the new season to start
There is obviously a lot of talk about El Nino potentially affecting the start of the new season in Oceania, but it is simply too early to tell. If we look at the facts, we can only conclude that Fonterra’s opening price was a little down from where they ended last season, but that price level is still quite positive in historic terms. Sales activity is also quite confident and seems to be based on high expectations for the first half of the new season.
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