Archive for Dairy Markets

USDA Slashes South American Crop Estimates

USDA slashes South American crop estimates: Argentina’s soybean and corn production cut due to drought, while Brazil faces harvest delays from excessive rain. What does this mean for global feed markets and dairy farmers? Find out how these changes could impact your operation.

Summary:

The USDA’s February 2025 WASDE report shows that Argentina and Brazil have faced tough weather, leading to cuts in their soybean and corn production. Argentina’s crop problems are due to drought, while Brazil’s crops are delayed by rain. This might cause feed prices to go up, affecting dairy farmers. While there’s still plenty of global feed, it’s smart for farmers to watch market trends and think about strategies like locking in feed prices and adjusting animal diets to save money and keep their operations stable.

Key Takeaways:

  • Due to adverse weather conditions, the USDA cut soybean and corn production estimates for Argentina and Brazil.
  • Argentina’s production decreases due to one of the driest Januarys on record, while Brazil’s harvest is delayed by excessive rain.
  • Despite these challenges, Brazil’s soybean production remains at a record-high level.
  • Due to these production cuts, feed costs for dairy farmers may increase marginally, affecting corn and soybean meal prices.
  • Global feed supplies remain sufficient, mitigating potential shortages and severe price hikes.
  • Dairy farmers are advised to consider hedging strategies and adapt feed rations to manage potential volatility in feed prices.
  • Maintaining awareness of global market trends and weather patterns is crucial for dairy farmers to navigate potential impacts on their operations.
Soybean field in South America, where production estimates have been cut due to adverse weather conditions.
Soybean field in South America, where production estimates have been cut due to adverse weather conditions.

The USDA’s February 2025 World Agricultural Supply and Demand Estimates (WASDE) report, released on February 11, 2025, has significantly reduced soybean and corn production forecasts for Argentina and Brazil, potentially impacting global feed markets and dairy operations

Key Production Cuts 

Argentina faced the most substantial reductions: 

  • Soybean production estimate cut by 3 million metric tons (MMT) to 49 MMT
  • Corn production forecast lowered by 1 MMT to 50 MMT

Brazil also saw adjustments: 

  • Corn production estimate reduced by 1 MMT to 126 MMT
  • Soybean production forecast remained unchanged at a record-high 169 MMT

These changes are reflected in the following table: 

CountryCrop2024/2025 Forecast (MMT)Change from January 10 (MMT)Change from 2023/2024 (MMT)
ArgentinaSoybeans49.0-3.00.8
ArgentinaCorn50.0-1.00.0
BrazilSoybeans169.00.016.0
BrazilCorn126.0-1.04.0

Weather Woes 

The cuts stem from contrasting weather patterns across South America

  • Argentina experienced one of the driest Januaries on record, severely impacting crop development
  • Brazil faced relentless rains, particularly in Mato Grosso state, delaying soybean harvest and planting of the safrinha (second) corn crop

As of February 9, 2025, farmers in Mato Grosso had harvested only 27.5% of their 2024-25 soybean crop, significantly behind last year’s 45.4% at the same time. 

Impact on Global Supply 

As the world’s top exporter of soybean meal and third-largest corn exporter, Argentina’s production cuts could ripple through global supply chains. However, Brazil’s stable soybean output may help offset some losses. 

U.S. Crop Outlook 

The USDA made minimal changes to the U.S. balance sheets for corn and soybeans: 

Crop2024/2025 Price ForecastChange from January 10Change from 2023/2024
Corn$4.35/bushel+$0.10-$0.20
Soybeans$10.10/bushel-$0.10-$2.30
Wheat$5.55/bushelNo change-$1.41

U.S. Ending Stocks 

CropFeb 2025 (Million Bushels)Avg EstimateJan 20252023-24
Corn1,5401,5371,5401,763
Soybeans380382380342
Wheat794800798696

World Ending Stocks 

CropFeb 2025 (MMT)Avg EstimateJan 20252023-24
Corn290.3293.1293.3317.5
Soybeans124.3128.5128.4112.4
Wheat257.6258.7258.8267.5

Implications for Dairy Farmers 

Feed Costs 

The most immediate concern for dairy farmers is the potential impact on feed costs: 

  • Corn Prices: The U.S. corn price forecast increased by 10 cents to $4.35 per bushel. This could lead to marginally higher feed costs, but the global corn supply remains ample, which should help moderate any price increases.
  • Soybean Meal: With Argentina’s reduced soybean production, protein supplement costs for dairy rations could rise. However, Brazil’s stable soybean production may help offset this impact.

Feed Availability 

Despite production cuts in South America, global feed supplies remain abundant and relatively inexpensive. This is positive news for dairy farmers, as it suggests that feed shortages are unlikely in the near term. 

Long-term Planning 

Dairy farmers should consider the following when planning for the coming months: 

  1. Hedging Strategies: With the potential for feed price volatility, farmers might want to consider locking in feed prices for the coming year to protect against possible increases.
  2. Ration Adjustments: If soybean meal prices increase significantly, farmers may need to explore alternative protein sources or adjust their feed rations to optimize costs while maintaining milk production.
  3. Crop Diversification: For dairy farmers who also grow their feed crops, the weather-related challenges in South America highlight the importance of crop diversification and resilient farming practices.

Milk Prices 

While the WASDE report doesn’t directly address dairy markets, changes in feed costs can indirectly impact milk production costs and, consequently, milk prices. If feed costs remain stable or increase only slightly, it could help maintain favorable margins for dairy operations. 

Expert Analysis 

“Farmers are harvesting their soybeans between showers and at high moisture levels to guarantee that the crop is put in storage before more rain keeps [farmers] out of the field,” reported the Soybean and Corn Advisor. 

Looking Ahead 

More rain will be needed in Argentina to avoid additional yield cuts. Meanwhile, the quality of Brazil’s soybean crop remains uncertain due to high moisture levels during harvest. 

As the situation evolves, dairy farmers should closely monitor market trends and be prepared to adjust strategies to maintain profitability in the face of potential feed market fluctuations. 

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Global Dairy Market Report for January 10th 2025: Volatility Amid Shifting Production

Dairy markets swing wildly as trade tensions boil over. The March Class III contract lurched more than a dollar in a single day, leaving farmers scrambling. With U.S. tariffs rising and China retaliating, the global dairy landscape faces an economic battle. Who will emerge victorious in this high-stakes game of dairy dominance?

Summary:

The global dairy market is facing challenges due to trade tensions and changes in production. In February 2025, there was significant activity, with EEX futures trading 2,100 tonnes of dairy products. Butter futures decreased while SMP futures went up. The Global Dairy Trade auction index increased by 3.7%. Regionally, Ireland and Poland saw strong milk production growth, while milk prices in China increased slightly after a long decline. In the U.S., trade issues impacted milk powder exports, but cheese exports to Mexico did well. With mixed results worldwide, dairy farmers must focus on being efficient and adaptable to navigate these changing market conditions.

Key Takeaways:

  • Global milk supply forecasted to grow by 0.8% in 2025, with all significant exporting regions expecting gains for the first time since 2020.
  • Trade tensions between the U.S. and Canada may disrupt established trade flows, influencing global dairy markets.
  • EU milk production shows recovery, but an overall decline is expected due to environmental and regulatory challenges.
  • U.S. dairy exports are mixed, with cheese exports booming despite a sharp decline in milk powder production.
  • China’s dairy market stabilizes, with import growth projected and farmgate milk prices rising for the first time in over two years.
  • Fluctuating prices and shifting production patterns reshape the global dairy landscape, presenting challenges and opportunities.
  • Dairy farmers are encouraged to adopt risk management, explore value-added products, and leverage emerging markets for growth.
  • Emphasis on efficiency and adaptability is crucial for dairy farmers to thrive in a dynamic and evolving market environment.

During a volatile week in the financial markets, dairy market prices fluctuated significantly due to escalating trade tensions. The March Class III contract swung more than a dollar in a single day, causing farmers and traders to react quickly to the rapid price changes. As the U.S. ratchets tariffs and China retaliates with precision strikes, the global dairy landscape finds itself caught in an escalating economic battle. Recent data from key exchanges and industry reports reveal a sector teetering between opportunity and crisis – but who will emerge victorious in this high-stakes game of global dairy dominance? As exports increase, production changes, and consumer preferences evolve, dairy farmers worldwide deal with a highly dynamic market. Will they adapt swiftly to seize new opportunities or falter under the pressures of volatility?

Market Dynamics 

Global milk production is forecasted to rise by 0.8% in 2025, driven by technological advancements, shifting consumer preferences, and improved farming practices across major exporting regions, marking the first simultaneous growth since 2020. This increase is influenced by higher prices paid to farmers for milk, lower costs for animal feed, and better weather conditions, indicating a possible positive change for the global dairy sector. This growth is driven by increased profitability for dairy farmers. Additionally, more affordable feed costs and favorable weather patterns support higher yields. 

Although there are positive expectations, the dairy market continues to be unstable for various reasons. A substantial increase in dairy processing capacity, particularly in the United States, is expected to reshape regional milk markets. China’s projected 2% year-on-year increase in dairy imports for 2025 could significantly impact global trade flows and prices. Additionally, ongoing trade disputes, especially between the United States and Canada, threaten to disrupt established trade patterns. 

Combining these factors results in a complicated and ever-changing global market landscape for dairy farmers and processors. Consumer demand fluctuations, driven by economic pressures and changing preferences, influence the market. While feed costs are currently favorable, they remain subject to fluctuations in the global commodity market. As the industry navigates these challenges and opportunities, adaptability and strategic planning will be crucial for success in the evolving global dairy landscape 2025. 

Country/Region2024 Expected (Billion Pounds)2025 Forecast (Billion Pounds)Change
Argentina23.624.71.1
Australia19.219.40.2
European Union320.9320.3-0.6
New Zealand47.648.10.5
Major Exporter Total411.3412.51.2

Source: USDA, Economic Research Service calculations based on USDA, Foreign Agricultural Service. Dairy: World Markets and Trade Report, December 2024.

Regional Production Trends 

European Union

In 2025, the European Union’s dairy industry shows varied trends among its member countries. While some countries show promising growth, EU milk production is forecast to decline marginally. 

Ireland stands out with a remarkable 30.1% year-over-year increase in December collections, showcasing the country’s strong recovery and efficient dairy farming practices. This surge is attributed to favorable weather conditions, improved feed quality, and strategic investments in dairy infrastructure. Poland and Spain also posted gains, with solid milk production up by 3.4% and 0.7% respectively in December. Poland’s growth is driven by ongoing consolidation in the dairy sector and investments in modern farming technologies. Spain’s modest increase reflects a gradual recovery from past obstacles, including economic downturns and supply chain disruptions, showcasing the industry’s resilience and adaptive strategies. 

Despite these positive indicators, the EU as a whole faces headwinds. It is predicted that milk output will slightly decrease to 149.4 million metric tons (MMT) in 2025, a drop from 149.6 MMT in 2024. This decline is attributed to several factors: 

  • Declining cow numbers: Stricter environmental regulations and farm consolidation are reducing overall herd sizes across the EU.
  • Tight farmer margins: Rising input costs, particularly for feed and energy, are squeezing profitability for many dairy farmers.
  • Environmental regulations: The EU’s Green Deal and Farm to Fork strategy impose stricter sustainability requirements, forcing some farmers to reduce production or exit the industry.
  • Disease outbreaks: Concerns about diseases like bluetongue in some regions are impacting production and trade.

The European dairy industry is also experiencing a shift in product focus. Cheese manufacturing is set to be a primary focus due to high local and international demand. This focus on cheese may come at the expense of butter, non-fat dry milk, and whole milk powder production. 

Looking ahead, the EU dairy sector must balance environmental sustainability with economic viability. Innovations in feed efficiency, animal welfare, and sustainable farming practices will be crucial for maintaining the EU’s position in the global dairy market.

United States 

In 2025, the U.S. dairy industry grapples with diverse challenges, including labor shortages and environmental regulations, alongside promising prospects such as export market growth and technological advancements. While milk production shows signs of growth, there are significant variations across product categories and regions. 

Cheese production experienced a dip of 0.7% year-over-year in December, totaling 1.2 billion pounds. This decrease is primarily attributed to shifts in consumer demand and increased competition from plant-based alternatives. However, the export market tells a different story, with cheese shipments surging by 21% compared to December 2023. This export boom is driven by strong demand from key markets like Mexico and South Korea and favorable exchange rates. 

Regional variations in milk production are becoming more pronounced. Texas and Idaho are leading the charge, with production increases of 7.5% and 3.5%, respectively. These states benefit from: 

  • Large-scale, efficient dairy operations
  • Favorable climate conditions for year-round production
  • Strategic investments in processing capacity

Other major dairy states also see increased milk production, albeit at more modest rates. Factors contributing to this growth include: 

  • Improved cow genetics, leading to higher per-cow yields
  • Adopt advanced technologies like robotic milking systems
  • Optimized feed management practices

However, challenges remain for the U.S. dairy sector: 

  • Labor shortages continue to impact farm operations and processing facilities
  • Environmental regulations, particularly regarding methane emissions, are becoming more stringent
  • Volatility in feed costs affects profitability

The USDA forecasts overall U.S. milk production to reach 227.2 billion pounds in 2025, slightly lower than previous estimates due to decreased milk per cow yields and adjustments in dairy cow inventories, signaling potential challenges for the industry. 

Adaptability and innovation will be key as the U.S. dairy industry navigates these complex dynamics. Farmers and processors are likely to focus on: 

  • Diversifying product offerings to meet changing consumer preferences
  • Investing in sustainability initiatives to meet regulatory requirements and consumer expectations
  • Explore new export markets to capitalize on strong global demand

Oceania 

The Oceania region, particularly New Zealand, plays a crucial role in the global dairy market. The strong participation in the latest Global Dairy Trade (GDT) event, with 182 bidders competing for 23,854 tonnes of product, underscores the region’s importance in setting global dairy price trends. 

New Zealand‘s dairy sector is anticipating significant seasonal peaks in production for 2025.  

  • Favorable weather conditions: La Niña weather patterns are expected to bring adequate rainfall, supporting pasture growth.
  • Herd management improvements: Farmers focus on breeding programs and animal health to increase per-cow productivity.
  • Technological advancements: Precision farming techniques enhance overall farm efficiency.

However, the industry also faces challenges: 

  • Environmental regulations: New Zealand’s government is implementing stricter environmental policies, which may impact production practices.
  • Land use competition: Increasing pressure from alternative land uses, such as forestry and horticulture, could limit dairy expansion.
  • Labor shortages: Like many countries, New Zealand is grappling with agricultural labor shortages.

Australia, the other major player in Oceania’s dairy sector, is expected to see modest growth in milk production. The country is recovering from previous droughts and focusing on rebuilding its dairy herd. 

Both countries will likely benefit from strong global demand, particularly from Asian markets. However, they must navigate changing consumer preferences, especially the growing demand for plant-based alternatives. 

China 

China, the world’s largest dairy importer, shows signs of market stabilization, with potential significant impacts on global dairy trade. Farmgate milk prices in January increased for the first time in 27 months, signaling a possible turning point in the country’s dairy sector. 

However, at 3.12 Yuan/Kg, prices remain 14.5% below year-ago levels, indicating ongoing challenges for domestic producers. This price pressure has led to: 

  • Consolidation in the dairy farming sector, with smaller farms exiting the market
  • Increased focus on efficiency and productivity among more extensive operations
  • Government initiatives to support the domestic dairy industry

In 2025, China’s milk production will fall by 1.5% year-on-year. This decline is attributed to: 

  • Herd reductions due to sustained low prices
  • Stricter environmental regulations impacting farm operations
  • Shift towards more extensive, more efficient dairy operations

Despite the projected decrease in domestic production, China’s dairy market remains dynamic: 

  • Consumer demand for dairy products continues to grow, particularly in urban areas
  • The government is promoting increased dairy consumption for nutritional benefits
  • E-commerce and innovative dairy products are expanding market reach

China’s dairy imports are projected to grow by 2% year-on-year in 2025, ending a three-year decline. This increase could significantly impact global dairy trade flows and prices. 

Key factors to watch in China’s dairy sector include: 

  • Government policies supporting domestic production vs. import reliance
  • Changing consumer preferences, especially among younger demographics
  • Developments in China’s trade relationships with major dairy exporting countries

As China’s dairy landscape evolves, it will play a pivotal role in shaping global dairy markets, influencing everything from commodity prices to product innovation. 

Trade Tensions and Market Volatility 

The dairy industry is central to a complex web of international trade disputes, with recent developments creating significant market uncertainty. The U.S., Mexico, and Canada have agreed to a 30-day détente, temporarily easing tensions in North American trade relations. This short-term truce is aimed at addressing shared concerns over drug trafficking across borders, highlighting the interconnected nature of trade and broader geopolitical issues. 

However, escalating trade conflicts with China overshadow the respite in North American tensions. The U.S. has implemented a sweeping 10% tariff increase on Chinese imports, which has prompted swift retaliation from Beijing. China’s response, characterized by targeted sanctions, demonstrates a strategic approach to economic warfare, potentially impacting specific sectors of the U.S. economy while minimizing domestic economic disruption. 

The ripple effects of these trade tensions are already evident in the dairy market. U.S. milk powder exporters, traditionally reliant on robust international demand, are adopting a cautious stance. The USDA’s Dairy Market News reports that Mexican demand for U.S. milk powder has become “subdued,” a concerning development given Mexico’s status as a key market for U.S. dairy exports. In 2024, Mexico imported approximately 576,000 metric tons of U.S. dairy products, making it the largest export destination for American dairy. 

This hesitancy extends beyond international buyers, with domestic purchasers also showing reluctance. Market analysts note a “chilling effect” on U.S. buyers, who are wary of committing to purchases in such an unpredictable environment. This cautious approach is encapsulated in the industry phrase of avoiding “catching the proverbial falling knife,” reflecting fears of buying into a declining market. 

These trade conflicts affect more than just milk powder; they extend to other dairy products. The dairy commodity spectrum, including cheese, butter, and whey products, faces potential disruption. For instance, U.S. cheese exports to Mexico, which saw a 36% year-over-year increase in August 2024, could be at risk if current trade uncertainties persist or escalate. 

Looking ahead, the industry faces several critical junctures that could further shape market dynamics: 

  1. The conclusion of the 30-day North American détente could lead to a more stable trading environment or a return to heightened tensions.
  2. Potential expansion of Chinese tariffs to include key dairy products like whey, which have so far been spared but remain vulnerable.
  3. The upcoming 2026 review of the U.S.-Mexico-Canada Agreement (USMCA) could reshape the North American dairy trade for years.

In this volatile climate, dairy producers and exporters must remain agile, ready to adapt to rapidly changing market conditions. Diversification of export markets, exploration of value-added product lines, and close monitoring of international trade policies will be crucial strategies for navigating these turbulent waters. 

Production Shifts and Export Trends 

The U.S. dairy industry is experiencing significant shifts in production patterns and export trends, with notable divergences between milk powder and cheese sectors. 

Milk Powder Production Decline 

U.S. milk powder output has substantially declined, with December production 15% lower than the prior year. This trend extends beyond a month, as 2024 milk powder production slumped 13% to reach the lowest annual total since 2013. Several factors contribute to this decline: 

  1. Shifting consumer preferences: Domestic consumers increasingly opt for alternative dairy products, reducing demand for traditional milk powder.
  2. Processing capacity reallocation: Many processors have shifted their focus to higher-value products like cheese and specialty ingredients, reducing capacity dedicated to milk powder production.
  3. Feed cost fluctuations: Rising feed costs have impacted milk production, with some farmers reducing herd sizes or shifting to alternative feed strategies.
  4. Environmental regulations: Stricter environmental policies in some states have reduced dairy herd sizes, impacting milk availability for powder production.

Booming Cheese Exports 

U.S. cheese exports are experiencing unprecedented growth compared to the milk powder sector. The U.S. exported 97 million pounds of cheese in December, marking a 21% increase compared to December 2023. This export surge has led to a record-breaking utilization of domestic production, with exports accounting for 8% of U.S. cheese production in 2024. Key drivers of this cheese export boom include: 

  1. Competitive pricing: U.S. cheese prices have become more competitive globally, attracting international buyers.
  2. Product diversification: American cheesemakers have expanded their product range, catering to diverse international tastes and preferences.
  3. Quality improvements: Investments in cheese-making technology and processes have enhanced the quality and consistency of U.S. cheese, making it more appealing to foreign markets.
  4. Trade agreements: Favorable trade agreements, particularly with Mexico and South Korea, have facilitated increased cheese exports.
  5. Marketing efforts: Aggressive marketing campaigns by U.S. dairy organizations have successfully promoted American cheese in key international markets.

Market Implications 

These contrasting trends in milk powder production and cheese exports have significant implications for the U.S. dairy industry: 

  1. Processor strategy shifts: More processors may pivot towards cheese production, given the strong export demand and higher profit margins than milk powder.
  2. Farm-level impacts: Dairy farmers may need to adjust their production strategies to meet the changing demand, potentially focusing on milk composition that favors cheese production.
  3. Global market positioning: The U.S. is strengthening as a significant cheese exporter while potentially ceding ground in the global milk powder market.
  4. Supply chain adaptations: U.S. dairy exports’ logistics and supply chain are likely to evolve, with increased focus on cheese transportation and storage.

As these trends unfold, the U.S. dairy industry must remain agile, adapting to changing global demand patterns and market opportunities. The contrasting fortunes of milk powder and cheese sectors underscore the importance of diversification and market responsiveness in the dynamic global dairy trade landscape.

Price Movements and Future Outlook 

YearAll-Milk Price Forecast (USD/cwt)
202523.05
202619.00
202719.10
202819.30
202919.50
203019.70

Source: USDA, Economic Research Service

The dairy market is experiencing significant price fluctuations across various products, reflecting the complex interplay of supply, demand, and global trade dynamics. 

CME Spot Market Trends: 

The CME spot nonfat dry milk (NDM) fell 1.5¢ to $1.33 per pound, reaching its lowest point since August. This decline suggests an oversupply in the milk powder market, potentially due to weakened export demand or increased domestic production. The drop in NDM prices could impact Class IV milk prices, as NDM is a key component. 

Similarly, CME spot Cheddar blocks also decreased, falling 1.75¢ to $1.86 per pound. This downward movement in cheese prices may indicate softening demand or increased production, which could pressure Class III milk prices. 

Global Dairy Trade (GDT) Auction Results: 

Unlike the CME spot market, the GDT auction demonstrated strength in powder markets. Whole milk powder (WMP) values jumped 4.1%, while skim milk powder (SMP) prices leapt 4.7%. These significant increases suggest robust international demand, particularly from key importing regions like Southeast Asia and China. The divergence between domestic U.S. prices and international auction results highlights the global nature of dairy trade and the potential for arbitrage opportunities. 

Future Price Outlook: 

The average milk price is forecast to rise by 5% in 2025 compared to 2024, driven by favorable trends in recent Global Dairy Trade auctions. This projection indicates a generally optimistic outlook for global dairy markets, supported by expectations of continued strong demand and potentially tightening supplies in major exporting regions. 

However, the U.S. market presents a contrasting picture, with projections of a decrease of 30 cents per hundredweight in all milk prices. This discrepancy between global trends and U.S. forecasts could be attributed to several factors: 

  • Domestic Supply and Demand Balance: The U.S. might increase milk production or face lower domestic demand than global markets.
  • Export Competitiveness: A stronger U.S. dollar or increased competition from other exporting nations could impact the U.S.’s position in global markets.
  • Policy Changes: Potential shifts in U.S. dairy policy or trade agreements could influence domestic pricing.
  • Regional Variations: The U.S. forecast may be more heavily influenced by specific regional production trends or processing capacities.

Implications for Dairy Farmers: 

These price movements and forecasts present a complex picture for dairy farmers. While global markets show signs of strength, U.S. producers may face challenges if domestic prices remain suppressed. Farmers must closely watch local and international market trends, adjust their production strategies, and explore new market opportunities to maximize their returns in this changing environment.

The Bottom Line

As the global dairy market navigates through unprecedented volatility in early 2025, dairy farmers worldwide find themselves at a critical juncture. The rising milk supply, shifting trade dynamics, and evolving consumer preferences create challenges and opportunities. While farmgate prices generally improve in many regions, trade tensions and potential tariffs loom large, particularly for U.S. producers eyeing the Mexican market. Success in this dynamic environment will hinge on adaptability and strategic foresight. Dairy farmers must focus on efficiency, embrace risk management strategies, and explore diversification opportunities. Whether investing in value-added products, adopting new technologies to address labor shortages, or implementing sustainable practices to meet evolving regulations, the path forward requires innovation and resilience. In 2025, the global dairy industry is positioned for growth but faces the risk of rapid changes due to geopolitical factors. Farmers who stay informed, remain flexible in their approaches, and capitalize on emerging market trends will be best positioned to thrive in this complex and ever-changing dairy ecosystem. 

How is your operation adapting to these market trends? Share your experiences and strategies in the comments below. 

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Dairy Markets Face Wild Swings Amid Trade Tensions

Dairy markets experienced unprecedented turbulence this week as trade tensions rattled the industry. The March Class III futures contract swung dramatically, moving more than $1 daily amid U.S. trade disputes with China and temporary détente with Mexico and Canada. Record cheese exports and shifting production patterns signal more volatility ahead.

Summary:

The dairy markets experienced unprecedented volatility this week amid escalating trade tensions. The March Class III futures contract demonstrated extreme instability, swinging more than $1 daily, while a 30-day trade détente with Mexico and Canada provided temporary relief. However, a new 10% U.S. tariff on Chinese imports sparked retaliation, though China notably spared dairy products.  Market impacts were immediate, with CME spot prices declining across commodities – nonfat dry milk fell 1.5¢ to $1.33 per pound, Cheddar blocks dropped 1.75¢ to $1.86, and barrels decreased 3¢ to $1.78. Despite these challenges, U.S. cheese exports hit record levels in December, up 21% year-over-year, though milk powder exports slumped 23% to their lowest December level since 2016.  The industry faces continued uncertainty as Mexico threatens higher tariffs on U.S. cheese if trade tensions resurface next month.

Key Takeaways:

  • March Class III futures experienced extreme volatility, swinging more than $1 in a single day on Monday, from 39¢ down to 71¢ up.
  • The U.S., Mexico, and Canada agreed to a 30-day trade détente, while the U.S. imposed a 10% tariff on Chinese imports. China retaliated but notably excluded whey and soybeans from tariffs.
  • CME spot prices declined across major dairy products: NDM fell 1.5¢ to $1.33/lb, Cheddar blocks dropped 1.75¢ to $1.86, and barrels decreased 3¢ to $1.78.
  • U.S. milk powder exports fell 23% year-over-year in December 2024, reaching the lowest December level since 2016.
  • December milk powder production was down 15% from the previous year, with 2024 total production dropping 13% to the lowest level since 2013.
  • Cheese production patterns shifted significantly in 2024: Gouda jumped 30.2%, Mozzarella rose 3.6%, while Cheddar fell 6.1%.
  • U.S. cheese exports hit record levels in December at 97 million pounds, up 21% from December 2023, with exports using 8% of total production in 2024.
  • Mexico dominated cheese exports, with shipments 30% higher than 2023, accounting for 38% of total U.S. cheese exports.
  • U.S. dairy heifer numbers have reached their lowest point since 1978, suggesting potential future supply constraints.
  • The Zisk app forecasts improved profitability for dairy farms in 2025, particularly for larger herds in the Southeast and Northeast regions.

A cheesemaker inspecting cheese wheels during the aging process, showcasing the careful monitoring required in cheese production amid current market volatility

Wild price swings hit dairy markets this week as trade tensions flared up. The March Class III milk futures contract moved up and down by more than $1 in a single day on Monday, showing just how uncertain things are right now. 

Trade Situation 

The U.S. made a 30-day deal with Mexico and Canada to pause new tariffs while they worked on border issues. Things with China are different – the U.S. put a 10% tax on Chinese goods, and China hit back with taxes on some U.S. products. For now, China isn’t taxing whey or soybeans, but that could change. 

Market Prices Today 

CME Spot Price ChangesPriceChange
Nonfat Dry Milk$1.33/lb-1.5¢
Cheddar Blocks$1.86/lb-1.75¢
Cheddar Barrels$1.78/lb-3¢

Uncertainty has pushed dairy prices lower across the board. Nonfat dry milk dropped 1.5¢ to $1.33 per pound, marking its lowest point since August. Cheddar blocks fell 1.75¢ to $1.86, while Cheddar barrels went down 3¢ to $1.78. 

Production Changes 

Cheese Production Changes 2024% Change
Gouda+30.2%
Mozzarella+3.6%
Cheddar-6.1%

Cheesemakers are shifting their production strategies significantly. Gouda production has surged by 30.2%, and Mozzarella output increased by 3.6%, setting new records. Meanwhile, cedar production has fallen by 6.1%. These changes reflect a move toward products that are popular with foreign buyers or ready for immediate consumption. 

December Dairy Export MetricsChange vs 2023
Total Cheese Exports+21%
Milk Powder Exports-23%
Cheese to Mexico+30%
Share of Production Exported8%

Total cheese exports hit a record in December at 97 million pounds. However, milk powder isn’t performing as well, with production falling 15% in December and exports dropping 23% to the lowest December numbers since 2016. 

What This Means for Farmers 

The outlook contains both positive and negative elements for dairy farmers. Larger farms in the Southeast and Northeast might see better profits in 2025. Cheese exports remain strong, especially to Mexico. However, due to trade uncertainty, farmers face significant challenges with unpredictable milk prices. There’s also concern that Mexico might tax U.S. cheese if trade talks go badly. 

Smart Moves for Farmers 

To handle these challenges, farmers should consider looking for different places to sell their milk and focus on producing high-quality components like fat and protein. Using futures contracts to protect against price drops and keeping up with market news and changes are essential strategies. Feed costs need careful watching, too. 

The dairy market is tough right now, but farmers who stay informed and plan will be in the best position to handle whatever comes next.

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Italian Cheeses Propel U.S. to Record 14.25B Pound Output

U.S. cheese production hit a record 14.25B lbs in 2024, driven by Italian styles like Mozzarella (+3.6%) while Cheddar fell to a 4-year low (-6.1%). Farmers adapted to milk shortages by prioritizing exports and high-component milk, reshaping dairy strategies amid EU tariff risks.

Summary:

In 2024, the U.S. achieved a record cheese production of 14.25 billion pounds, mainly due to increased demand for Italian cheeses like Mozzarella. While Cheddar production dropped to its lowest level since 2020, farmers focused on exporting and improving milk quality to boost profits. Gouda also saw significant growth due to demand in Asia, though future EU tariffs could pose challenges. As the industry adapts to changing markets and milk supplies, strategies like hedging and regional planning will be essential to sustain growth amid shifting domestic and international pressures.

Key Takeaways:

  • Record Output: U.S. cheesemakers produced 14.25B pounds (+41.76M YoY), driven by Italian styles like Mozzarella (+3.6%) and Gouda (+30.2%) despite milk shortages.
  •  Italian Cheese Surge: Italian cheeses surpassed 6B pounds (+2.4% YoY), with exports offsetting domestic foodservice declines.
  • Cheddar Decline: Cheddar fell to 3.85B pounds (-6.1%), lowest since 2020, due to scarce milk, high restaurant prices, and shifts to Gouda.
  • Price Volatility: Monthly Cheddar production drops caused spring/fall price spikes (peaking at $1.92/lb vs 5-year avg $1.68).
  • Export Risks: Gouda/Mozzarella farmers face EU tariff threats, shipping cost hikes (+22% YoY), and currency risks (Mexican peso volatility cut profits 4%).

U.S. cheese production hit a historic 14.25 billion pounds in 2024 (+41.76M YoY), powered by Italian-style cheeseslike Mozzarella while Cheddar output fell to a 4-year low. Farmers must now compete on milk components, not just volume.

Table 1: 2024 U.S. Cheese Production Trends 

Cheese TypeProduction (B lbs)YoY ChangeKey DriverSource
Italian6.00+2.4%Mozzarella exports (+3.6%)USDA Jan-Nov 2024
Cheddar3.85-6.1%Domestic demand slumpUSDA Dec 2024
Gouda0.080+30.2%Asian market expansionEU Commission Q4 2024

Italian Cheese Drives Growth 

Italian cheese crossed 6 billion pounds (+2.4% YoY) for the first time, led by: 

  • Mozzarella exports: 38% shipped to Mexico/Asia (USDA Jan- Nov 2024)
  • Component premiums: up to $0.20/cwt bonuses for high-fat milk (Dairy Farmers of America Q3 2024)
  • Jersey herds: 18% YoY growth for butterfat optimization

Why it matters: Jersey cows now yield $2.18/cwt premiums over Holsteins (USDA 2024), reshaping herd genetics. 

Table 2: Cheddar Price Volatility (2024) 

PeriodAvg Price ($/lb)Peak Price ($/lb)5-Year Avg ($/lb)
Spring1.851.921.68
Fall1.781.891.68
Source: CME Group (2/9/2025), USDA AMS

Cheddar’s Decline Reshapes Markets 

American cheese output fell 3.9%, with Cheddar plunging to 3.85B pounds (-6.1%)—lowest since 2020. Farmers faced: 

  • Processed cheese slump: Demand for slices fell 9% (CME Group 2/9/2025)
  • Milk cuts: 23% fewer Cheddar plant contracts
 Cheddar FarmersItalian/Gouda Suppliers
2025 RiskDomestic demand shiftsEU trade rule changes
OpportunityNew processing plantsAsian export growth

Table 3: U.S. Cheese Export Markets (2024) 

Region% of ExportsKey ProductGrowth vs 2023
Mexico38%Mozzarella+17%
Asia29%Gouda+25.6%
EU16%Specialty-4% (Tariff risk)
Source: USDA FAS (2024), Pecorino Romano Consortium

Gouda’s 30% Surge Faces EU Hurdles 

Gouda production jumped to 80.27M pounds (+30.2%), driven by Asian markets, but EU tariffs threaten $0.15/lbprofits (EU Commission Q4 2024). Farmers near Wisconsin (+14%) and Idaho (+9%) plants gained: 

  • Stable contracts: 64% include currency hedging
  • Regional buyers: new processors in export zones

Strategic Shifts for 2025 

  1. Test milk monthly: butterfat/protein checks for premiums (USDA §120.5)
  2. Hedge prices: Lock in 40-60% via CME futures
  3. Regional focus

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U.S. Dairy Margins Hit 3-Year Low Despite Global Price Surges

Dairy farmers face a perfect storm as 2025 margins tighten to $10.14-$12.47/cwt. Despite global price surges, domestic demand plummets by 20%. With feed costs rising and regional disparities widening, operators must navigate complex market forces. Will your strategy beat the 37% profitability threshold?

Summary:

The market outlook paints a complex picture for U.S. dairy farmers. While the Global Dairy Trade auction showed unexpected strength with whole milk powder up 4.1%, skim milk powder up 4.7%, and butter up 3.4%, domestic demand in the U.S. plummeted in December 2024. Cheese consumption fell 3.1%, butter 7.0%, and nonfat dry milk 20.2%. U.S. milk equivalent exports were down 2.6% year-over-year, with nonfat dry and skim milk powder exports dropping 23.4%. The margin dashboard projects tightening margins for dairy farmers, ranging from $10.14 to $12.47 per cwt through November 2025. Regional variations are significant, with Wisconsin having the highest projected margin at $11.75/cwt and California having the lowest at $9.09/cwt. The report highlights the need for farmers to navigate carefully between export opportunities and weakening domestic demand while managing feed costs, which are projected to rise in 2025.

Key Takeaways:

  • Dairy farmers’ profit margins vary significantly by region, with the Midwest showing higher returns than areas like the Southwest.
  • Feed costs are rising, drastically impacting profitability due to its substantial share in dairy farming budgets.
  • The Midwest benefits from lower feed costs, but labor shortages present ongoing challenges for farmers.
  • Southwest dairy farms face tighter margins due to higher operational costs and fluctuating milk prices.
  • To counteract financial pressures, adopting export strategies, innovative feeding practices, and exploring new product lines are recommended.
  • Upcoming USDA events and webinars offer opportunities for farmers to collaborate and explore solutions in the current economic climate.

Empty shelves tell the story: U.S. dairy demand plummets 20.2% in December 2024. As domestic consumption falters (-3.1% cheese, -7% butter), farmers face tightening margins and export reliance. Will 2025’s $10.14–$12.47/cwt projections leave your operation stocked for survival?

Midwest operators lead with $11.75/cwt margins, while Texas operators grapple with $10.65 returns. American dairy farmers face unprecedented margin compression in 2025, with projections showing national averages of $10.14-$12.47/cwt through November. While Global Dairy Trade (GDT) auctions show 4.1% gains for whole milk powder, the collapse of December’s domestic demand (-20.2 % for nonfat dry milk) creates complex regional challenges. 

Regional Realities Demand Tailored Responses 

Margin Disparities Emerge 

RegionMargin (USD/cwt)Key Challenge
Midwest11.75Labor costs
Northwest10.84Water Access
Southwest10.65Feed logistics

Source: USDA/CME State Profiles 

Strategic Implications 

While Wisconsin’s $11.75/cwt margins lead the nation, Texas operators face dual pressures of $12.04 feed costs and tightening credit markets. California’s $9.09 margins now require 18% greater efficiency than 2024 averages to maintain profitability. 

Operational Shifts by Region 

Midwest Opportunities 

  • Lock March corn at $4.93 before seasonal demand spikes
  • Leverage 21.1% cheese export growth through Great Lakes ports

Southwest Challenges 

Operators must develop tailored strategies to address these geographic disparities. For Northwest operators facing $11.10/cwt feed costs, three immediate actions emerge: 

  1. Implement RFID feed tracking to reduce waste by 9%
  2. Shift 15% of production to value-added butter markets
  3. Hedge soybean meal at $328/ton November futures

Market Mechanics Behind Margins 

Feed Cost Pressures Intensify 

CommodityCurrent Price2025 Projection
Corn$4.93/bu+4.2% YoY
SBM$308/ton+6.8% YoY

Production Paradox 

Cheese exports surged 21.1% despite 0.7% lower domestic output, creating inventory headaches for Midwest cooperatives. Meanwhile, butter markets show concerning divergence: 

  • CME spot prices down 3.4%
  • GDT auction prices up 3.4%

The Bottom Line

Dairy operators face a pivotal moment as 2025 projections reveal margins tightening to $9.09-$11.75/cwt nationwide. Regional disparities call for tailored strategies, such as leveraging Wisconsin’s labor-cost advantages against California’s $11.91/cwt feed cost crunch. While export markets offer a silver lining with a +4.1% increase in Global Dairy Trade (GDT) gains, the domestic demand downturn (-20.2% for nonfat dry milk) urges farmers to focus on efficiency tools such as precision feeding or transitioning to value-added shifts—like seeing a 14% rise in buttermilk production. Due to this tightness in margins, there is no room for guesswork. Operators must lock in favorable corn futures at $4.93 for March 2025 immediately. Operators must lock in favorable corn futures at $4.93 for March 2025 to surpass the 37% profitability threshold. Will your operation surpass the 37% profitability threshold? 

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CAFTA-DR Unleashes U.S. Dairy Export Boom: $441M Tariff-Free Breakthrough in 2025

A 19-year tariff phaseout has unlocked Central America’s dairy market, but melting ice cream and EU rivals threaten gains. Will farmers seize the moment or stall? 

Summary:

The CAFTA-DR trade deal, finalized after nearly 20 years, boosted U.S. dairy exports from $40 million pre-2006 to $441 million by 2025, thanks to the complete removal of tariffs. This expansion has made Central America an essential market for American dairy, particularly in cheese, milk powders, and whey. However, exporters still face non-tariff challenges like high port fees in Nicaragua, approval delays in El Salvador, and competition from the EU and New Zealand. As U.S. dairy farmers adapt to these hurdles, they must invest in technology and forge co-op partnerships to stay competitive.

Key Takeaways:

  • U.S. dairy exports surged to $441 million following the full implementation of the CAFTA-DR trade deal.
  • Cheese exports dominate the CAFTA-DR dairy trade, leading with over half of the market share.
  • While tariffs have been eliminated, non-tariff barriers such as high port fees and lengthy approval processes remain challenges.
  • The CAFTA-DR region is now the third-largest market for U.S. dairy exports, emphasizing its significance.
  • Global competition is intensifying, with rival trade deals potentially impacting U.S. market share.
  • Dairy farmers must adapt strategies based on farm size to leverage export opportunities and remain competitive.
  • Future growth will depend on expanding into new markets, adopting technology, and strategic policy negotiations.
  • Small and medium farms may rely on cooperative agreements to achieve export success.
  • The demand for advanced technology, such as blockchain for product tracking, may pose financial challenges for smaller farms.

Six CAFTA-DR countries fueled a 1,117% surge in U.S. dairy exports since 2006. Central America now ranks as the third-largest market for American milk, cheese, and whey

At midnight on January 1, 2025, U.S. dairy tariffs vanished across Central America under the fully implemented CAFTA-DR trade deal, capping a 19-year phaseout that supercharged exports from $40 million pre-2006 to $441 million today. Cheese shipments charge $238 million annually, with milk powders ($120M) and whey ($35M) rounding out a market critical to absorbing America’s growing milk surplus. 

Category2006 Exports2023 Exports2025 ProjectionsGrowth (%)
Cheese$34m$238m$264m+595%
Milk powders$3.2m$120m$135m+3,650%
Whey products$2.8m$35m$48m+1,150%
Total$40m$441m$527m+1,217%

How CAFTA-DR Reshaped Dairy Trade 

The agreement, negotiated by the National Milk Producers Federation (NMPF) and the U.S. Dairy Export Council (USDEC), began lowering tariffs in 2006. This slow-but-steady approach allowed farmers to adapt: 

  • Cheese exports surged by 595%, representing 54% of the CAFTA-DR dairy trade.
  • Milk powders supported Guatemala’s $2.1B bakery industry growth.
  • Whey became a staple in 72% of regional animal feed mixes

Jaime Castaneda from NMPF highlighted that the patience invested in CAFTA-DR led to a tenfold increase in dairy exports over the 19 years. “But tariffs alone aren’t magic—trust took 7,000 farm visits and 19 years of problem-solving.”

The payoff? Central America now ranks as the third-largest U.S. dairy export market, trailing only Mexico and Canada. 

Zero Tariffs ≠ Smooth Sailing 

CountryTariff StatusKey Non-Tariff BarrierAvg. Delay/Cost
El Salvador0% since 2025Facility registrations72 days
Nicaragua0% since 2025Port inspection fees+$42k/shipment
Guatemala0% since 2025Labeling disputes21% rejections
Dominican Republic0% since 2025Quota administration+$15k/compliance

However, despite the achievement, exporters now face new challenges: 

  • Nicaragua’s 33% port fees increased shipment costs by $42,000 per shipment in 2024.
  • El Salvador’s 72-day approvals: Delays tripled since 2023
  • Canada’s retaliatory 25% border tax puts $578 million in annual U.S. dairy sales at risk due to Canada’s retaliatory 25% border tax.

“My ice cream melted in Costa Rican customs last month—$12,000 gone because paperwork ‘wasn’t shiny enough,’” says Idaho farmer Kaitlyn Voeller. USDEC’s Sarah Schmidt notes progress: “We’ve resolved 14 non-tariff barriers since July 2024, but it’s Whac-A-Mole. For every successful resolution, three new issues arise, creating a continuous cycle of challenges.” 

Global Rivals Race Ahead 

While U.S. farmers celebrate CAFTA-DR, competitors gain ground: 

CompetitorRecent Trade DealU.S. Dairy Risk
EUJapan FTA (87k-ton cheese quota)\$1.3B loss by 2030
New ZealandVietnam 45% tariff cutsWhey share ↓ 8%
CanadaRetaliatory 25% border tax\$578M at risk

Sarah Schmidt warns that the EU is making agreements while the U.S. is still in discussions. “If we delay discussions with Kenya and Indonesia, we risk losing a generation of farms.” 

Farm Size Dictates Strategy 

With U.S. milk production hitting 227.2B pounds in 2025 (USDA), survival hinges on exports: 

  • Small farms (50–500 cows): Pool through co-ops like Dairy Farmers of America’s new Guatemala contracts
  • Mid-sized (500–5K cows): Target niches like Honduras’ 340% rise in artisanal cheese demand
  • Large operations (5K+ cows): Invest in dedicated plants, e.g., Lupino Farms’ $220M Texas facility

Ben Strauss, an Ohio dairy farmer with 180 cows, credits his farm’s survival to the strategic decision to sell 40% of his milk to CAFTA-bound gouda cheese products. “But for $3,000 per heifer, margins vanish faster than morning fog for dairy farmers.” 

Navigating the Future: The Crucial Decade for Milk’s Survival 

  1. The USDA aims to target new middle-class consumers in Asia by 2030 and capture a share of the 2.1 billion potential customers in CAFTA-adjacent markets like Colombia.
  2. Tech Upgrades: Costa Rican buyers now require Blockchain shelf-life tracking systems, which cost $15K each. However, 83% of small farms cannot afford this upgrade.
  3. Policy conflicts are escalating, with battles over Canada’s border tax, the EU’s Philippines dairy pact, and ongoing negotiations with Kenya and Indonesia.

Castaneda emphasizes that while CAFTA-DR marks a significant milestone, the crucial task now is to shape the future to prevent being overtaken by competitors proactively. 

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Global Dairy Trade Auction Hits 30-Month High: Key Takeaways for Farmers

Global dairy markets surge as GDT index hits 30-month high! Farmers worldwide are looking for opportunities amid rising prices for key products. From supply chain shifts to regional strategies, discover what the latest auction results mean for your bottom line. Is this the turnaround the industry’s been waiting for?

Summary:

The Global Dairy Trade auction brought a significant 3.7% rise in the GDT index, which peaked in July 2022. Prices jumped for key products like lactose, driven by demand in Asia. Increased bidder activity and higher average prices also marked this strong recovery. Factors like rising Chinese imports and European cheese premiums influence the market, while low US heifer numbers pose challenges. Farmers should focus on opportunities with skim and whole milk powders, manage risks from US-Canada tariffs and fluctuating feed costs, and use strategic approaches for market shifts.

Key Takeaways:

  • The GDT index rose by 3.7%, reaching its highest point since July 2022, indicating a positive trend in global dairy markets.
  • The average price per metric tonne increased to €4,181, showcasing a robust rebound in market confidence.
  • Lactose experienced the most significant price increase, driven by rising Asian demand for pharmaceuticals and processed foods.
  • Participation from bidders increased significantly, reflecting heightened interest and competition in the market.
  • Key products like Skim Milk Powder (SMP) and Whole Milk Powder (WMP) saw substantial gains, marking them as products for potential profitability.
  • Despite overall positive trends, challenges remain with reduced auction volumes and ongoing geopolitical tensions impacting trade dynamics.
  • Farmers are encouraged to capitalize on current premium prices by focusing on value-added production, particularly for butter and cheddar.
  • Understanding regional demand and adapting strategies to meet these needs can bolster opportunities, especially in North America and Oceania.
  • With volatile feed costs, prudent risk management and planning are crucial for farmers navigating the current market environment.
Global Dairy Trade, GDT index surge, dairy market recovery, lactose price increase, farmers' opportunities

The Global Dairy Trade (GDT) auction has recently marked a significant milestone, reaching its highest index value in 30 months. This achievement is a crucial indicator of vitality within the global dairy markets, illustrating a much-anticipated rebound that resonates positively with dairy farmers worldwide. 

Key Results: Strong Rebound Continues 

The Global Dairy Trade (GDT) index surged 3.7% in Event 373 (February 4, 2025), hitting 1,264 points – its highest level since July 2022[1]. This marks the second consecutive gain after January’s 1.4% rise, signaling renewed market confidence. 

Key metrics: 

  • Average price: €4,181/metric tonne (+3.7% vs. January)
  • Volume sold: 23,854MT (down 21% from January’s 30,156MT)
  • Bidder activity: 182 participants (+39 from January)
ProductPrice ChangeAvg. Price (€/MT)
Lactose+17.7%1,022
Skim Milk Powder (SMP)+4.7%2,759
Whole Milk Powder (WMP)+4.1%4,058
Cheddar+3.7%4,891
Butter+3.4%7,029
Butter Milk Powder-0.4%3,009
Mozzarella-0.1%4,046

Standout: Lactose prices exploded amid growing Asian demand for pharmaceuticals and processed foods. 

Market Analysis: Recovery Gains Momentum

  • Auction volatility: 8 gains vs. four losses in the last 12 auctions since August 2024
  • Demand drivers: Improved Chinese imports (+2% YoY forecast)[4] and EU cheese premiums (+16.1% YoY)
  • Supply pressures: US heifer herds at 47-year lows, while EU milk production grows modestly (+1.1% forecast)

Comparative Performance 

Auction DateIndex ChangeKey Movers
Feb 4, 2025+3.7%SMP, WMP surge
Jan 21, 2025+1.4%WMP +5%[42]
Jan 7, 2025-1.4%Butter -7.8%[42]
Dec 17, 2024-2.8%WMP -2.9%[9]

Implications for Farmers 

  1. Pricing Opportunities
    • Capitalize on SMP/WMP premiums (€2,759–4,058/MT)[1] amid tight global stocks
    • Leverage butter/cheddar demand (€7,029–4,891/MT) for value-added production
  2. Risk Management
    • Monitor US-Canada tariff war: 25% duties on $1.2B trade risk market access
    • Prepare for feed cost swings: Corn ($4.90/bushel) and soybean meal ($304.70/ton) remain volatile
  3. Regional Strategies
    • North America: Redirect Canadian cheese exports (83,800MT)[5] and US butter ($119M Canadian market)
    • Oceania: Target Asian WMP demand (+2.5% to $4,012/MT)
    • Europe: Balance strong butter prices (€7,471/MT) against rising production costs

The Bullvine Bottom Line 

While February’s rally offers relief, dairy markets remain fragmented by trade wars and supply chain shifts. Farmers should: 

  1. Prioritize component-focused production (fat/protein) for premium returns
  2. Diversify beyond tariff-impacted markets (e.g., Southeast Asia’s lactose boom)
  3. Lock in feed contracts ahead of La Niña-driven volatility

Next GDT Auction: February 18, 2025 – Watch for impacts from Trump’s new agricultural tariffs.

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Weekly Global Dairy Market Recap February 3rd 2025: Tariffs Spark Market Upheaval

Trump’s 25% tariffs rocked the $1.2B North American dairy trade, creating market chaos as Asian buyers drive prices skyward while European markets crumble. With US heifer numbers at 47-year lows and feed costs volatile, dairy farmers face tough choices in a rapidly fragmenting global market. Here’s your survival guide.

 Summary:

Implementing a 25% tariff on North American dairy trade has significantly disrupted global markets, leading to regional price divergence, with European prices falling and Asian demand rising. This tariff has impacted $1.2 billion in US-Canada dairy trade, exacerbating supply constraints as US heifer numbers plummet to levels unseen since 1978. As farmers grapple with these pressures and volatile feed and input costs, the need for strategic adaptation has never been more pressing. Shifts in supply chains and market strategies will continue through Q2 as farmers navigate these unprecedented challenges worldwide.

Key Takeaways:

  • Global dairy markets experience significant shifts due to newly imposed 25% tariffs on North American dairy trade.
  • Regional price disparities widen, with European butter prices dropping and Asian Whole Milk Powder (WMP) prices rising.
  • US dairy production focuses on fat and protein content, slightly decreasing overall milk output.
  • Trade disruptions result in immediate market challenges, particularly for US exports to Canada and Canadian cheese surplus.
  • Feed and input costs show volatility driven by international weather conditions, affecting dairy farm operations.
  • Decreasing US dairy heifer numbers indicate potential future supply constraints.
  • Geopolitical developments necessitate strategic adjustments by dairy producers to navigate evolving market conditions.
dairy trade tariffs, North American dairy market, global dairy prices, US heifer numbers, dairy farmers survival strategies

Global dairy markets fracture as Trump’s 25% tariffs slam $1.2B trade.

Today’s implementation of 25% tariffs on North American dairy trade creates unprecedented market disruption, just as regional price gaps hit record levels. Here’s what dairy farmers need to know.

Market Splits Deepen 

Regional price differences hit record levels, creating both threats and opportunities:

RegionProductChangePrice
European UnionButter+0.5%€7,471
 SMP+0.4%€2,517
 WMP+0.9%€4,313
Asia-PacificWMP+2.5%$4,012
 SMP+0.2%$2,976
 AMF+0.2%$6,734
United StatesButter-9.75¢$2.4325/lb
 Cheddar+4.5¢$1.8775/lb
 Dry Whey-5.75¢$0.64/lb

While Asian buyers drove WMP up 2.5% to $4,012/tonne, European butter futures plunged 2.3% to €7,109/tonne last week. As inventories swell, US butter crashed to $2.43/lb, an 18-month low. These widening regional price differences create both threats and opportunities for strategic farmers. 

Production Landscape 

Global milk production shows dramatic regional shifts as farmers adapt to new market realities:

RegionVolume ChangeMilk solidsKey Driver
US-0.5% YoY+1.6%Component Focus
New Zealand+1.0% YoY+2.3%North Island Surge
Australia-1.1% YoY-1.1%Labor Costs
Italy+1.1% YoY+1.9%EU Subsidies

US milk output dropped 0.5% in December despite component levels jumping 1.6%, showing farmers focusing on fat and protein content over volume. New Zealand collections rose 1.0%, with the North Island showing a 1.9% increase, outperforming the South Island. Australian farmers struggled with a 1.1% decline, though season-to-date numbers remain positive at +0.8%. 

Trade War Reality 

The new 25% tariffs targeting $1.2B in the US-Canada dairy trade are creating immediate market disruption: 

  • US butter exports to Canada ($119M market) face severe pressure
  • 83,800 tonnes of Canadian cheese need new buyers
  • Government relief packages cover less than 20% of the projected losses incurred by the industry.
  • Market analysts expect supply chain reorganization through Q2

Feed & Input Costs 

Current market conditions signal potential margin pressure ahead:

Input TypeCurrent PriceChange
Corn (Mar25)$4.9025/bu
Soybean Meal$304.70/ton
DMC Feed Price$9.92/cwtUnchanged

Supply Constraints 

US dairy heifer numbers hitting their lowest point since 1978 suggest tight milk supplies are ahead. With today’s tariffs implemented, anticipate ongoing market volatility as supply chains adapt.

What This Means for Dairy Farmers

The current market conditions present both challenges and opportunities for dairy farmers worldwide:

North American Farmers 

  • U.S. producers face immediate pressure from the new 25% tariffs, particularly those exporting butter to Canada ($119M market).
  • Canadian farmers must manage 83,800 tonnes of cheese needing new markets, with relief packages covering less than 20% of expected losses.
  • Both U.S. and Canadian farmers should prepare for significant supply chain disruption through Q2 2025.

European Producers 

  • EU farmers see mixed signals, with butter prices up 0.5% to €7,471 but facing pressure from increased production.
  • British producers can expect 1.1% production growth in 2025, though margins may tighten in the year’s second half.
  • Component prices remain strong, with cheese premiums up 16.1% year-over-year.

Oceania Operations 

  • New Zealand farmers benefit from strong Asian demand, with WMP up 2.5% to $4,012/tonne.
  • Australian producers face a 1.1% production decline but maintain positive season-to-date numbers (+0.8%).

Strategic Considerations 

  • Record-low U.S. heifer numbers suggest tight supply ahead, potentially supporting prices.
  • Feed costs remain stable (corn at $4.90/bushel, soybean meal at $304.70/ton).
  • Component-focused production strategies show promise, with U.S. milk solids up 1.6% despite volume decline.

Action Items 

  1. Review export market exposure and consider diversification
  2. Monitor component levels as markets reward fat and protein content
  3. Evaluate feed contracts with South American weather concerns looming
  4. Consider heifer retention strategies given tight replacement markets

Flexibility in production and marketing strategies, while focusing on operational efficiency and component optimization, will be the key to survival.

What’s Next? 

With US heifer numbers at 47-year lows and new trade barriers taking effect, expect: 

  • Continued regional price divergence
  • Supply chain restructuring through Q2
  • Increased price volatility in North American markets
  • Growing Asian demand supporting Oceania prices

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European Dairy Farmers Profit as Milk Prices Surge by 21% Amid Rising Supply

European dairy farmers are riding a wave of prosperity as milk prices soar and production surges. With prices up 21% and supply growing, the industry faces a golden era. But will this boom last? Discover how this trend reshapes the global dairy landscape and what it means for farmers worldwide.

Summary: 

European dairy farmers are experiencing a remarkable upturn in fortunes as milk prices surge over 21% compared to the previous year, reaching an average of €50.86 per 100 kg in December 2024. Simultaneously, milk production increased by 1.8% in November, with some countries like Ireland seeing dramatic growth of 34%. Leading companies such as DMK and FrieslandCampina offer even higher prices, up to €55.57 per 100 kg. However, this boom has challenges, including environmental regulations and potential market saturation. The situation is impacting global dairy markets, potentially affecting farmers worldwide. Industry experts advise cautious optimism, emphasizing the need for sustainable practices and efficiency improvements to navigate future market fluctuations.

Key Takeaways:

  • European dairy farmers benefit from rising milk prices and increased production, contributing to a thriving market.
  • Top European dairy companies like DMK and FrieslandCampina offer high prices, rewarding quality milk production.
  • The milk supply in Europe is growing, with significant increases seen in countries like Ireland.
  • Strict environmental regulations pose challenges for farmers despite the financial gains from current high prices.
  • The European dairy market significantly influences global dairy trade, affecting producers worldwide.
  • Farmers face balancing profitability with environmental sustainability and adapting to market demands.
European dairy farmers, milk prices, dairy production, global dairy market, environmental regulations

European dairy farmers are benefiting financially due to the surge in milk prices and increased production. Milk prices jumped over 21% from last year, while the milk supply grew by 1.8% in November. This simultaneous increase signals a rising demand for Europe’s dairy products. 

Milk Prices Hit New Highs 

European dairy farmers are making more money than ever, with earnings reaching record highs in December 2024. In December 2024, they received an average payment of €50.86 for every 100 kg of milk. That’s €0.51 more than in November and 21% higher than last year. 

German company DMK and Dutch group FrieslandCampina are paying the most. They offer €55.57 and €55.56 per 100 kg of milk for German company DMK and Dutch group FrieslandCampina. 

According to Dr. Emma Schmidt, a specialist in agricultural economics, the combination of high demand and limited supply is driving prices to unprecedented levels.

Milk Prices Across Top European Dairy Companies

CompanyCountryMilk Price (€/100 kg)Quality Bonuses
DMKGermany55.57High
FrieslandCampinaNetherlands55.56High
Hochwald MilchGermany54.26Medium
MilcobelBelgium53.60Medium
Laiterie des ArdennesBelgium41.51Low

More Milk Across Europe

While prices rise, farmers are also producing more milk. In November 2024, the milk supply in Europe grew by 1.8%. 

  • Ireland’s milk production jumped by 34% in November after a long time of making less.
  • France and Poland also made more milk.
  • Belgium, Germany, and the Netherlands made less milk than before.

EU-27 Monthly Weighted Average Milk Prices

Month2024 Price (€/100 kg)Change from 2023
January46.45-16.67%
February46.39-13.03%
March46.44-7.62%
April46.09-3.01%
May45.97+1.06%
June46.12+4.11%
July46.54+6.43%
August47.54+9.24%
September49.61+14.28%
October51.71+16.46%
November53.48+17.69%
December53.95+15.82%

Quality Milk Pays Off 

Farmers who produce the best milk are paid the most. The highest prices are for milk with low levels of germs and cells. 

A Dutch dairy farmer and advisor, Hans van der Meer, notes, “Quality has always been important in dairy. Now it’s paying off more than ever.”

Effects on World Markets 

The developments in Europe have ripple effects on dairy farmers worldwide due to interconnected global markets. 

Dr. Maria Gonzalez, an expert in the global dairy trade, explains that changes in the European dairy market have worldwide implications. The rise in prices and production could increase competition for farmers worldwide, from New Zealand to Wisconsin.

Challenges Despite Good Times 

Even with high prices, dairy farmers face some problems. Strict environmental rules, especially in countries like the Netherlands, pressure farmers. 

Dutch dairy farmer Joost Vermeulen points out the challenge of balancing profitability with strict environmental rules, highlighting the difficulty of combining economic success with environmentally friendly practices.

Climate change could result in challenges like reduced milk production and higher expenses for cattle feed, creating more difficulties for dairy farmers. Bad weather could make it harder to produce milk and make cow feed more expensive. 

Looking to the Future 

There is speculation about the longevity of the current prosperity as dairy farmers navigate through favorable circumstances. Will prices stay high? Can farmers keep making more milk without flooding the market? 

Dr. Schmidt advises farmers to be cautious and satisfied. Investing in improved practices during prosperous times is crucial to prepare for future market fluctuations.

Europe’s developments have positive and negative outcomes for dairy farmers worldwide, shaping the industry’s future. Adapting to evolving global markets will be crucial for long-term success. 

What do you think about Europe’s dairy boom? How might it affect dairy farms where you live? Share your thoughts in the comments below. 

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US Dairy Market Shifts: Cheese Prices Surge 15% While Butter Hits 18-Month Low

Dairy farmers face a market of extremes as 2025 kicks off. Cheese prices soar while butter plummets, trade wars loom, and feed costs squeeze margins. From regional variations to tech innovations, navigate the complexities of today’s dairy landscape. Discover strategies to thrive in this volatile market.

Summary:

Adaptability and strategic planning will be key to success as the dairy industry navigates these turbulent waters. The contrasting trends in cheese and butter markets, regional production variations, and looming trade uncertainties present challenges and opportunities. Farmers who stay informed, embrace technological innovations, and remain flexible in their approach stand the best chance of thriving. Whether optimizing production for high-demand products, exploring new export markets, or implementing cost-effective feed management strategies, the path forward requires a blend of traditional wisdom and modern innovation.  As we move further into 2025, the dairy landscape will continue to evolve. Those who can swiftly adjust their strategies, leverage data-driven insights, and capitalize on emerging trends will be best positioned to weather the storms and reap the rewards of this dynamic industry. What steps will you take to ensure your dairy operation survives and thrives in the coming years?

Key Takeaways:

  • Cheese prices surge due to high demand, especially from Asia, while butter experiences a significant price drop due to oversupply.
  • Dairy farmers must adapt strategies based on regional production trends and potential trade disputes affecting export markets.
  • Rising feed costs pressure profit margins, pushing farmers toward efficient feed management and cost-effective alternatives.
  • Adopting technology and sustainable practices can enhance efficiency and optimize operations amid market volatility.
  • Farmers should focus on maximizing opportunities in cheese production and explore alternative uses for cream to manage butter oversupply.
  • Trade tensions may impact international markets, urging diversification of export destinations to mitigate risks.
dairy market trends, cheese prices surge, butter oversupply, feed cost management, trade war impacts

As January 2025 ends, U.S. dairy farmers encounter significant market differences. Cheese prices have surged an unexpected 15% this month, while butter values have plummeted to an 18-month low, reshaping strategies across the industry. 

Surge in Cheese Prices Driven by High Demand in the Market 

CME cheese prices surged from $1.80 to $2.07 per pound in three weeks. Demand has outstripped availability despite industry expectations of oversupply due to new production capacity. 

Despite industry expectations of oversupply, the market responds positively to increased demand. We’re seeing a 20% increase in export inquiries, particularly from Asia, which drives this unexpected surge.”

Dairy farmers can benefit from the current strength in the cheese market. Are these changes sustainable, and what steps should farmers take? 

Butter Market Faces Oversupply Challenges 

ProductCurrent PriceChange from Last YearStock Level Change
Cheese$2.07/lb+15%-6.0% yoy
Butter$2.45/lb-22%+11.4% yoy

In stark contrast to cheese, the butter market is drowning in surplus. On Thursday, CME spot butter hit $2.45 per pound, marking an 18-month low and a 22% drop from last year’s prices. December stocks were up 11.4% year-over-year, exceeding expectations by 15 million pounds.

The surplus of inexpensive cream is influencing the pessimistic outlook on butter prices. Cream prices are at $1.20 per pound of butterfat, down 30% from last year. To address the oversupply, farmers should be cautious in butter production and consider alternative uses for cream.

Regional Variations Paint a Complex Picture 

The December U.S. milk production report reveals significant regional differences: 

RegionProduction Change (YoY)
California-6.8%
Wisconsin+2.1%
Idaho+3.5%
Texas+4.2%
New York-1.2%

This divergence could have notable impacts on local market dynamics and pricing. Tom Brown, a dairy industry consultant, advises, “Farmers need to tailor their strategies based on their specific region. What works in California might not be applicable in Wisconsin or Texas. For instance, California farmers might consider shifting more milk to cheese production given the current market trends.” 

Trade War Concerns Loom Large 

The dairy industry faces potential disruption from looming trade disputes. From February 1, the U.S. plans to add tariffs of up to 25% on dairy imports from China, Canada, and Mexico. Canada and Mexico have indicated they may retaliate against U.S. dairy products.

While previous trade disputes in 2018 had limited impact, the uncertainty could affect export markets and prices. Farmers relying heavily on exports to countries facing potential tariffs should explore diversifying their markets. South America and Southeast Asia could offer promising alternatives.

“It is an ongoing battle to ensure Canada upholds its trade commitments on dairy,” stated Kimberly Crewther, Executive Director of DCANZ.

Feed Costs Squeeze Margins Across Regions 

Feed TypePrice Increase (Last Quarter)
Corn+8%
Soybean Meal+12%
Hay+5%
Silage+3%

Higher-than-expected feed costs in all regions are impacting profit margins. Corn prices have risen 8% and soybean meal 12% since last quarter, squeezing farm profitability.

Farmers need to focus on efficient feed management and explore cost-effective alternatives. To address high feed costs, you can increase the use of homegrown forages or explore alternative feeds to reduce dependence on costly commodities.

Jennifer Hayes, Chair of the Canadian Dairy Commission, commented on the slight decrease in farmgate milk prices: “Although a continued inflationary environment, producer efficiencies, and productivity gains have contributed to help balance on-farm costs this year, resulting in a decrease in the cost of production.”

Embracing Technology and Sustainability for Future Success 

As market volatility increases, some farmers turn to technology and sustainable practices to maintain profitability. Precision dairy farming tools, such as automated milking systems and data-driven feed management, are gaining traction. 

Looking Ahead: Strategies for Dairy Farmers 

Given the complex market conditions, dairy farmers are encouraged to consider the following strategies to navigate the challenges ahead: 

  1. Optimize cheese production to capitalize on the currently strong cheese prices in the market
  2. Exercise caution in managing butter production and explore innovative uses for surplus cream to mitigate the oversupply issue
  3. Implement efficient feed cost management, considering alternative feed sources
  4. Develop region-specific strategies based on local production trends
  5. Prepare for potential trade war impacts by diversifying export markets
  6. Focus on margin optimization through technology adoption and sustainable practices
  7. Monitor both domestic and international markets closely, particularly EU and New Zealand trends

Nate Donnay, Director of Dairy Market Insight at StoneX, explained the recent cheese market trends: “In a single month, the CME spot cheese market dropped around 20%, with Class III futures dropping around 15%”.

As the dairy landscape evolves, staying informed and adaptable will be key to navigating challenges and seizing opportunities. As the future unfolds, those swiftly adapting their strategies will be best positioned to succeed.  

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New Zealand Dairy Boom: Record Production Meets Sky-High Prices, But What About Profits?

New Zealand’s dairy industry is breaking records, but at what cost? As milk production soars and prices hit new highs, farmers face a complex reality of rising expenses and environmental challenges. Discover how Kiwi dairy farmers are navigating this boom and what it means for the future of global dairy markets.

Summary:

New Zealand’s dairy industry is experiencing a remarkable surge, with milk production reaching 5.84 billion pounds in December 2024, up 1.4% from the previous year. Fonterra’s estimated pay price of $9.50-$10.50/kg of milk solids could set a new record. However, this boom comes with significant challenges. Rising input costs, including feed, fertilizer, and fuel, are eroding profit margins despite high milk prices. Environmental pressures and potential shifts in Chinese demand add further complexity. Farmers are urged to focus on cost management, efficiency, and sustainability to navigate these challenges. While the industry contributes 25% to New Zealand’s export earnings, balancing profitability with sustainability remains crucial for long-term success in an evolving global market.

Key Takeaways:

  • Understand cost of production (COP) thoroughly to make informed decisions on feed purchases and process extensions.
  • Sustainability is vital: adopting eco-friendly practices can secure long-term profitability and market access.
  • Keep abreast of Chinese market trends and adjust export strategies to avoid over-dependence.
  • Invest in technologies that enhance productivity while containing costs for increased efficiency.
  • Develop strategies for financial resilience to withstand global market volatility and rising operational expenses.
New Zealand dairy industry, milk production growth, rising milk prices, production costs challenges, environmental sustainability

New Zealand’s dairy industry is making headlines with Record-breaking milk production and the subsequent rise in milk prices. However, while the numbers look promising, the challenges of increasing production costs (COP), inflation, and environmental issues make the reality more complicated for farmers. Increasing production expenses, inflation, and ecological obstacles indicate that high incomes may not result in significant profits. Let’s explore what this boom means for farmers. 

Record-breaking milk production and rising milk prices 

YearMilk Production (billion pounds)Milk Solids (million pounds)Fonterra Pay Price ($/kg MS)
20235.76568.58.00 – 9.00
20245.84576.59.50 – 10.50

New Zealand milk production reached 5.84 billion pounds in December 2024, up 1.4% from December 2023, marking the highest volume for the month since 2020. Milk solids also increased by 1.4% year-over-year to 576.5 million pounds, with solids for the 2024-25 season up 3.7% compared to the previous year. 

Fonterra, New Zealand’s largest dairy cooperative, recently raised its estimated pay price to $9.50-$10.50/kg of milk solids for the 2024-25 season. If realized, this would be among the highest payouts ever recorded for Kiwi producers. 

While these figures highlight strong market performance, Many farmers note that despite high milk prices, the increasing costs of production and environmental challenges often negate the expected profits, highlighting their complex financial realities. 

Rising Costs of Production: The Profitability Challenge 

Input Cost2020 Price2024 Price% Increase
Feed$398/ton$439/ton10.3%
Fertilizer$578/ton$585/ton1.2%
Fuel$1.16/liter$1.91/liter64.7%

Despite high milk prices, farmers are grappling with rising input costs. Feed, fertilizer, fuel, and labor expenses have all increased sharply due to global inflation and supply chain disruptions. Recent estimates suggest that breakeven milk prices for intensive systems now exceed $6.50/kgMS, leaving little room for profit even with record payouts. 

One farmer shared their perspective:

“We’re nowhere near the profitability we saw pre-COVID. Input costs are insane right now, so margins are tight even with these high prices.”

This highlights a critical issue: profitability is not just about income but also about effectively managing costs, which has become increasingly difficult in recent years. 

China’s Influence on Demand 

New Zealand maintains its dominance in China’s dairy market, boasting a 90% market share for whole milk powder (WMP) imports, as reported by recent trade data. Chinese demand has rebounded due to dwindling domestic milk powder inventories and a declining milking herd. This has helped push WMP prices above $4,000/MT, their highest level over two years. 

However, there are concerns about how sustainable this demand will be. China is investing heavily in its domestic dairy industry to reduce reliance on imports, which could impact New Zealand’s export opportunities in the long term. While Chinese demand is strong, New Zealand farmers should prepare for potential shifts as China ramps up its domestic production capabilities. 

Global Dairy Trade Performance 

The Global Dairy Trade (GDT) auctions have reflected strong demand for New Zealand products. Although WMP prices eased slightly in December and early January, they rebounded at the GDT auction on January 21, 2025, and again at GDT Pulse events. WMP prices now sit at $4,000/MT, while skim milk powder prices have also risen. 

While these price levels are promising, farmers are cautious about over-reliance on short-term market trends, recognizing the importance of addressing long-term challenges like increasing production costs (COP) and market volatility for sustained profitability. 

Environmental Challenges: Balancing Profitability and Sustainability 

The environmental impact of intensified dairy farming is another significant challenge facing New Zealand’s industry. Agriculture accounts for nearly half of the country’s greenhouse gas emissions, with dairy farming being a major contributor. 

Farm nitrate leaching has led to widespread water quality issues across New Zealand, resulting in the implementation of stringent environmental regulations that not only raise costs for farmers but also endanger ecosystems. 

Farmers are under increasing pressure to adopt sustainable practices—not just because they are suitable for the environment but also because they are becoming essential for market access and long-term profitability. Investing in sustainability can help farmers future-proof their operations while meeting regulatory requirements and consumer expectations. 

Implications for Farmers: Be Strategic 

Given the contradictory conditions of high prices and escalating costs, farmers should adopt strategic approaches, such as diversifying income sources, optimizing resource utilization, and exploring sustainable practices to mitigate financial risks and maximize profitability. Blanket recommendations like “buy more feed” or “extend lactation periods” don’t work for every operation because every farm’s financial situation is unique. 

Consider the following considerations for farmers navigating these conditions: 

  • Know Your Costs: Before making decisions like purchasing supplemental feed or extending lactation periods, calculate your cost of production (COP, which includes all expenses related to production) to ensure it is financially viable.
  • Focus on Efficiency: Invest in technologies or practices that improve productivity without significantly increasing costs.
  • Monitor Global Trends: Keep an eye on Chinese demand and GDT auction results but remain cautious about over-reliance on export markets.
  • Plan for Volatility: Build financial resilience by setting aside reserves during profitable periods to weather future downturns.
  • Sustainability Matters: As environmental regulations tighten, adopting sustainable practices now can help future-proof your farm.

Industry Impact and Future Outlook 

While current conditions present opportunities for income growth, profitability remains challenging due to the dual factors of rising costs and market uncertainties. The New Zealand dairy sector contributes around 25% to the country’s total merchandise export earnings, highlighting its economic importance and susceptibility to global market changes. 

Environmental pressures loom large over the industry as consumers and regulators demand more sustainable practices.  Balancing profitability with sustainability will be critical as New Zealand navigates this period of growth.

The Bottom Line 

New Zealand’s dairy boom is a double-edged sword: while high production and prices create opportunities for income growth, rising input costs and inflation mean profitability remains elusive for many farmers. As global markets evolve and environmental challenges mount, Kiwi farmers are at a critical juncture where they must balance seizing opportunities with fulfilling their responsibilities. 

This isn’t just about acknowledging record figures—it’s about understanding how those numbers directly impact farmers’ financial well-being. By prioritizing efficiency, sustainability, and strategic decision-making, New Zealand’s dairy industry can effectively navigate these challenges and build a more resilient future. 

What are your thoughts? Can high milk prices offset rising costs on your farm? Share your experiences and strategies in the comments below to continue this conversation! 

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Bullvine Daily is your essential e-zine for staying ahead in the dairy industry. With over 30,000 subscribers, we bring you the week’s top news, helping you manage tasks efficiently. Stay informed about milk production, tech adoption, and more, so you can concentrate on your dairy operations. 

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Global Dairy Market Report January 27th 2025 : Price Gains and Rising Production Amid Challenges

As 2025 begins, global dairy markets show mixed signals. Commodity prices are strengthening in key areas, while production trends vary across major exporting regions. From rebounding Chinese demand to ongoing challenges in the U.S., dairy farmers face a complex landscape of opportunities and hurdles.

Summary:

The global dairy market is showing mixed trends. Prices for key products like butter and whole milk powder are increasing, thanks to strong futures markets and positive auction results. Milk production is growing in places like the UK, New Zealand, and the EU, but the U.S. faces challenges because there aren’t enough young cows or heifers. China’s repurchasing more dairy, feed costs are stable, and people are trying new plant-based options, but traditional dairy is still prevalent. Farmers should focus on improving milk quality and watching costs while staying updated on what might change in the dairy market.

Key Takeaways 

  • Dairy commodity prices showed strength in several key areas, particularly WMP, and butter
  • Milk production is increasing in major exporting regions, except for the U.S.
  • Chinese dairy imports have rebounded, potentially signaling improved global demand
  • Feed costs remain relatively stable, offering opportunities for strategic purchasing
  • Policy changes and trade developments continue to create both challenges and opportunities for the sector
  • Farmers should focus on efficiency, component production, and risk management strategies
dairy industry 2025, commodity prices, global dairy trade, plant-based alternatives, U.S. dairy sector challenges

The dairy industry experienced a complex mix of trends in the week leading up to Monday, January 27, 2025. Farmers, processors, and industry stakeholders closely monitor fluctuating prices, shifting milk production patterns, and evolving global demand trends. This recap aims to provide dairy farmers with crucial insights to effectively navigate the current market conditions. 

Commodity Prices Show Strength in Key Areas 

The dairy commodity markets demonstrated resilience in several sectors, offering a glimmer of hope for producers who have been grappling with tight margins: 

Futures Markets Performance 

  • European Energy Exchange (EEX): Butter futures increased notably to an average of €7,295 for January-August 2025, showing a 1.2% rise compared to the previous week. This uptick suggests improved market sentiment for milk fat. Skim Milk Powder (SMP) futures also saw a modest gain, rising 0.4% to €2,655 for the same period.
  • Singapore Exchange (SGX): Whole Milk Powder (WMP) futures for February-September 2025 showed notable strength, gaining 1.4% to an average of $3,914. SMP futures on the SGX platform also strengthened, climbing 0.8% to $2,970 for the corresponding timeframe.

Global Dairy Trade (GDT) Auction Results 

ProductPrice ChangeAverage Price
WMP+5.0%$3,988
SMP+2.0%$2,729
Butter+2.2%$7,550
AMF-7.8%Not provided
Cheddar+2.8%$4,846

During the bi-weekly GDT auction on January 21, a strong market trend was confirmed: 

  • The Overall Price Index in the GDT auction rose by 1.4% to reach $4,146.
  • WMP: jumped 5.0%, leading the gains
  • SMP: rose 2.0%, indicating solid demand for milk proteins
  • Butter: increased by 2.2%, aligning with the positive trend seen in futures markets

These GDT results are encouraging for dairy farmers worldwide. The significant rise in WMP prices, especially noteworthy due to renewed buying interest from key importing regions, indicates a buoyant market shift.

European Spot Market Quotations 

European dairy product quotations as of January 22 showed a range of outcomes: 

  • Butter: The index rose €21 (+0.3%) to €7,434, with variations across countries:
    • German butter stable at €7,400
    • French butter up €21 (+0.3%) to €7,561
    • Dutch butter increased €40 (+0.5%) to €7,340
  • SMP: Overall index decreased by €14 (-0.6%) to €2,508:
    • German SMP weakened by €50 (-2.0%) to €2,475
    • French SMP gained €10 (+0.4%) to €2,500
    • Dutch SMP remained flat at €2,550
  • Whey: Held steady at €873, unchanged across all three primary quotations
  • WMP: Index dropped by 3.8% to €4,275, with notable variations:
    • French WMP plummeted €513 (-11.3%) to €4,030
    • Dutch and German WMP remained stable at €4,430 and €4,365, respectively

Milk Production Trends: A Global Perspective 

RegionProduction ChangeNotable Factors
EU-27+UK+2.2% (Nov 2024)Cumulative Jan-Nov: +0.7%
UK+4.3% (Dec 2024)Strong year-end performance
New Zealand+1.4% (Dec 2024)Season to date: +3.1%
United States-0.5% (2024 total)Bird flu impact, heifer shortage

Milk production patterns differed widely across major dairy exporting regions, creating both opportunities and challenges for the global market: 

European Union and United Kingdom 

  • EU-27+UK: November 2024 production estimated at 12.39 million tonnes, up 2.2% year-over-year
  • Cumulative production for January-November 2024: 148.6 million tonnes, +0.7% compared to 2023
  • Milkfat content: 4.31%
  • Protein content: 3.53%

United Kingdom 

  • December 2024: Production totaled 1.32 million tonnes, up 4.3% year-over-year
  • November 2024: Reported at 1.26 million tonnes, a 5.2% increase from 2023
  • 2024 Total: Cumulative production reached 15.48 million tonnes, up 1.1% from 2023

Milk Composition:

  • December: 4.44% fat, 3.43% protein
  • November: 4.43% fat, 3.46% protein

New Zealand 

  • December 2024: Collections reached 2.65 million tonnes, up 1.4% year-over-year
  • Season 2024/25 to date: 13.16 million tonnes, a 3.1% increase from the previous season
  • Milk Solids: December production up 1.4% to 228.3 million kgs
  • 2024 Calendar Year: Total milk solids production of 1,923 million kg, up 2.1% from 2023

United States 

  • The U.S. dairy sector faced specific challenges in 2024, including impacts from avian influenza in California that affected production. 
  • Overall Production: Down 0.5% for the year, primarily due to impacts from avian influenza in California
  • Herd Size: December 2024 saw 9.351 million milk cows, just 3,000 more than December 2023
  • Regional Variations:
    • California: Production plummeted 6.8% due to bird flu impacts
    • Texas: Impressive 7.5% year-over-year increase
    • Idaho: Strong 3.5% growth
    • Wisconsin: Slight 0.1% uptick

 The shortage of replacement heifers is significantly hindering potential herd growth for dairy farmers. While farmers are eager to expand given current price signals, the lack of replacement animals is a significant limiting factor.

Market Forces and Industry Dynamics 

Various factors influence the dairy industry, including evolving global demand trends and dynamic market forces. 

Global Demand Trends 

Chinese Imports: December saw significant year-over-year increases across various dairy products:

  • WMP: More than doubled
  • SMP: Up 42%
  • Whey powder: Increased 12%
  • Cheese: Rose 17% 

This uptick in Chinese purchasing activity fuels cautious optimism about global dairy demand recovery

Feed Market Outlook 

Feed ComponentPriceChange
Corn (Mar)$4.8575/bushelSteady
Soybeans (Mar)$10.55/bushel+$0.20
Soybean Meal$304/ton+$6.60
  • Corn: March futures held steady at $4.8575 per bushel
  • Soybeans: March contract added 20¢, reaching $10.55
  • Soybean Meal: Futures jumped $6.60 to $304 per ton

While feed markets show some upward pressure, prices remain relatively stable, allowing farmers to lock in favorable rates for the coming months. 

Consumer Trends and Market Evolution 

  • Plant-based alternatives, such as almond milk and soy-based products, are gaining significant traction in developed countries and gradually capturing a larger market share.
  • Traditional Dairy: Maintains strong positions in emerging economies and specific product categories
  • Butter Consumption: U.S. domestic butter consumption increased by 7% in 2024, following a 6% rise in 2023

Policy and Trade Developments 

Several policy and trade factors are expected to affect the dairy sector in 2025: 

  • U.S. Federal Milk Marketing Order (FMMO) Reform: Ongoing discussions about potential changes to the pricing system could affect risk management strategies for both producers and processors
  • Indian Union Budget 2025: Set for presentation on February 1, with the dairy sector anticipating measures to boost production through infrastructure investments and technological innovation
  • Trade Relations: Potential tariffs and evolving trade agreements continue to create uncertainty in export markets

Implications for Dairy Farmers 

In response to the current market conditions, dairy producers should consider implementing the following strategies: 

  1. Optimize Component Production: With strong values for butterfat and protein, focus on nutritional strategies to boost milk solids output
  2. Monitor Input Costs: Keep a close eye on feed prices and explore opportunities to lock in favorable rates for the coming months
  3. Herd Management: In regions facing heifer shortages, prioritize cow longevity and explore alternative strategies for maintaining or growing herd size
  4. Risk Management: Utilize available tools such as futures contracts or forward contracts to hedge against price volatility
  5. Stay Informed: Keep abreast of policy developments, particularly potential FMMO changes in the U.S., which could significantly impact milk pricing
  6. Market Diversification: Explore opportunities to tap into growing markets or product categories, such as value-added dairy products or exports to emerging economies

The Bottom Line

As we progress through the early months of 2025, the global dairy market presents a complex and dynamic environment. Farmers must remain vigilant, adaptable, and focused on operational efficiency to navigate these challenging waters successfully. By staying informed about local conditions and global market forces, producers can position themselves to capitalize on opportunities and mitigate potential risks in the evolving dairy landscape. 

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Bullvine Daily is your essential e-zine for staying ahead in the dairy industry. With over 30,000 subscribers, we bring you the week’s top news, helping you manage tasks efficiently. Stay informed about milk production, tech adoption, and more, so you can concentrate on your dairy operations. 

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Navigating Growth Despite Heifer Shortages – Dairy Market Report for Week Ending January 24, 2025

2025’s kicking off with a wild ride of heifer shortages, production swings, and market surprises. From California’s bird flu bounce-back to China’s renewed appetite for our products, we’re breaking down the latest dairy market trends that’ll impact your bottom line this year.

dairy industry growth, milk production increase, cheese market transition, organic dairy products, global dairy trade

As the dairy industry approaches 2025, significant growth is on the horizon. Despite the heifer shortage, we have strategic plans to facilitate our expansion. This week’s report details the impact of milk production, global markets, and prices on our dairy business. From California’s bird flu recovery to China’s increasing dairy purchases, we’re optimistic about the industry’s future. 

Heifer Shortage and Milk Production 

YearProjected U.S. Milk Production (billion pounds)Average Milk Cows (million)Milk per Cow (pounds)
2024227.39.34524,330
2025227.29.39024,200

This table summarizes key production metrics and shows the slight decrease expected in 2025. 

The heifer shortage is significantly affecting our operations. In 2024, we only sent 2.76 million cows to slaughter—the lowest number since 2008. While this helped stabilize our herds, achieving growth has been challenging. Most major dairy states are increasing milk production compared to last year, although the outcomes vary. 

  • Wisconsin: up a hair at 0.1%
  • Texas: jumped 7.5% 
  • Idaho: up 3.5%
  • New York: inched up 0.7%
  • Michigan: climbed 1.4%

However, California’s dairy sector is facing significant challenges due to the impact of the bird flu outbreak, which has affected milk production in the state. Production dropped 6.8% due to the bird flu outbreak, significantly impacting the state’s dairy industry. The good news is that January is looking better. New infections are down, so milk output should start picking up. 

Butterfat and Protein Production 

However, there are some positive developments to highlight: 

  • Butterfat production jumped 1.9% in 2024
  • Protein output grew 0.5%
  • Nonfat solids fell 0.1%, and other milk solids dipped 0.4%

Butter stocks grew to 222.4 million pounds in December 2024, up 11.4% from the previous year. Consumers have shown a preference for butter as well. Domestic consumption leaped 6% in 2023 and another 7% in 2024. 

Cheese and Whey Markets 

The cheese market is currently undergoing a transitional phase. Stocks were tight in 2024, but now we’re looking at more output in 2025. There’s also some worry about potential tariffs. Stocks grew from November to December but were still 7% smaller than the previous year. 

In the whey market, high prices are starting to subside. Buyers live hand to mouth, hoping for more dry whey output and lower prices. 

Global Dairy Trade and China’s Imports 

Positive news globally: Milk powder prices have risen at the Global Dairy Trade auction, indicating a positive trend for the dairy market. Whole milk powder jumped 5%. China is also starting to buy more dairy products. Their imports of whole milk powder, skim milk powder, whey powder, and cheese are all up compared to last December. 

Milk Powder Prices and Market Trends 

Product2025 Price Forecast (USD/Pound)Change from Previous Forecast
Cheddar Cheese1.865+$0.065
Dry Whey0.640+$0.045
Butter2.695+$0.010
Nonfat Dry Milk1.340+$0.040

U.S. milk powder prices declined slightly, dropping 2.5 cents to $1.3475. People are worried about trade prospects and a rebound in production. 

In the futures market: 

  • Class III closed at $19.37 per cwt., down 81¢ from the previous value.
  • Most Class IV contracts lost about a nickel

On the feed side: 

  • March corn futures held steady at $4.8575 per bushel
  • March soybeans added 20¢, hitting $10.55
  • Soybean meal futures jumped $6.60 to $304 per ton

Additionally, it’s essential to monitor Argentina’s developments. Their president just announced a temporary cut to corn and soy export tariffs. 

Looking Ahead 

The USDA now estimates that we’ll produce about 227.2 billion pounds of milk in 2025, down slightly from its earlier estimate. It also forecasts that our national herd will comprise about 9.390 million cows. Rabobank predicts that the milk supply from the big exporting countries will grow by about 0.8% in 2025. Feed is cheaper, and the weather has been better. 

Prices are showing favorable indicators: 

  • The projected all-milk price for 2025 is now $23.05 per cwt, showing an increase of 50 cents from the previous estimate.
  • Cheddar cheese is looking at $1.865 per pound
  • Butter’s at $2.695 per pound

Consumers are increasingly choosing organic whole milk, cottage cheese, and yogurt. To drive positive changes, consider exploring new options. 

The Bottom Line

Together, we can overcome challenges and achieve success. Stay informed, innovate continuously, and ensure the resilience of the dairy industry. How do you plan to address these challenges on your farm? Every contribution plays a part in driving our industry forward. Let’s ensure that dairy excels in 2025! 

Key Takeaways:

  • U.S. milk production decreased by 0.5% in 2024, facing continued challenges in 2025.
  • Skyrocketing heifer prices are prompting farmers to extend the working life of their dairy cows.
  • Bird flu continues to affect California, though overall prospects are improving.
  • Global milk supply growth is anticipated at 0.8% in 2025.
  • China’s increased dairy purchases reflect its recovery from a three-year slump.

Summary:

The U.S. dairy market in 2025 is facing some challenges, like a shortage of heifers and problems with bird flu, affecting milk production. Farmers are keeping their cows longer because replacing them is too expensive. Even with these issues, there’s still some good news. Butter and protein production are both up. There’s a lot of butter around, but cheese prices are unstable. On the bright side, China is buying more dairy, which helps the global market. People in the U.S. are also buying more butter and milk powders. Despite the challenges, 2025 could be an interesting year for the dairy industry, with chances for growth and new opportunities.

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Ireland’s Milk Production Surges 34% in November, Boosting European Output

Irish dairy farms shatter records with a 34% milk production surge. Discover how this boom reshapes European markets and what it means for global dairy trends.

Summary:

In November 2024, Ireland’s milk production jumped by 34%, producing a record 510 million liters. This growth came from better weather, higher profits for farmers, and help from dairy companies. Ireland’s milk, with fat content of 4.99% and protein content of 3.98%, matches high standards. This boom also increased production in European countries like Poland and France. While this could create more competition and affect prices worldwide, it might help European farmers sell more to places like Asia and Africa. Dr. Emma O’Sullivan points out that focusing on sustainable farming practices is crucial for the future.

Key Takeaways:

  • Ireland’s milk production in November 2024 marked a record-breaking 510 million liters, demonstrating a 34% surge compared to the previous year.
  • Improvements in weather conditions, favorable economic variables, and targeted processor initiatives have fueled this significant production increase.
  • Ireland’s milk showcased better fat and protein content than U.S. averages during the same period.
  • European milk production trends reveal growth in several key countries, balancing production declines in others, such as Germany and the Netherlands.
  • This surge suggests a potential reshaping of the global dairy market, which stakeholders will closely monitor.
Ireland dairy farms, milk production increase, European dairy industry, sustainable farming strategies, high-quality milk

Ireland’s dairy farms are making waves across Europe. In November 2024, they produced 510 million liters of milk, smashing previous records. This 34% increase over the prior year, 2023, is a testament to the resilience and adaptability of Irish dairy farmers, and it has drawn attention in the dairy world.

What’s Behind the Surge?

In 2023, it was tough for Irish dairy farmers. Lousy weather in late 2023 led to a 21% drop in milk production. But now, things have changed dramatically. Here’s why:

  1. Weather Shift: The bad weather lasted into early 2024, pushing the usual spring milk boost to later in the year.
  2. Increased Profits: Farmers earn more for their milk while reducing feed expenses.
  3. Encouragement from Irish dairy companies: Farmers are urged to increase production, with some even importing cows from Northern Ireland.

 “This significant increase in Irish milk production could impact the operations of the European dairy industry,” states Dr. Emma O’Sullivan, a dairy expert. The surge in production could lead to increased competition, potentially affecting prices and market dynamics across Europe.

Not Just More, But Better

Irish cows aren’t just producing more milk – it’s high-quality stuff, too. In November 2024:

  • Fat content was 4.99%
  • Protein content was 3.98%

These numbers are significantly higher than those produced by U.S. cows.

Europe-Wide Growth

Ireland isn’t the only country seeing more milk. Here’s how other European countries did:

CountryProduction IncreaseFat ContentProtein Content
Ireland34.0%4.99%3.98%
Poland3.9%4.20%3.40%
France1.8%4.15%3.35%
Italy1.5%4.10%3.30%
Spain0.9%4.05%3.25%
Germany-1.9%4.18%3.38%
Netherlands-0.4%4.22%3.42%

Some countries, like Germany and the Netherlands, saw small drops. But overall, Europe produced 1.8% more milk than in November 2023.

What This Means for Dairy Farmers

The Implications of the Rise in Milk Production for Farmers Worldwide

“We might see more competition in the global market,” says Michael O’Connor, an economist who studies the dairy industry.

Looking to the Future

With increased milk production, several outcomes may arise:

  1. Milk Prices: Prices might decrease initially because more milk is available.
  2. Selling to Other Countries: European farmers might be able to sell more milk to countries in Asia and Africa.
  3. Farming Practices: Farmers might need to find new ways to produce milk that is good for the environment.

Dr. O’Sullivan emphasizes the importance of Irish dairy farmers strategizing for sustainable long-term farm growth. This is not just a choice but a responsibility that we all share in preserving our environment and ensuring the future of our industry.

The Bottom Line

The Irish dairy industry is showing that it can recover from past challenges. As things change, farmers, dairy companies, and government officials must work together to keep the industry strong.

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Global Dairy Market in 2025: Production Shifts, Demand Fluctuations, and Trade Dynamics

The global dairy industry is changing as people want more organic and eco-friendly products. Producers are now using green practices and offering new products to overcome economic challenges.

Summary:

The global dairy market is changing a lot. U.S. milk production dropped by 1.0%, while the European Union’s milk production went up by 2.0% and Argentina saw a 4.4% rise. This puts pressure on U.S. farmers to be more efficient and try new strategies. Overall demand is mixed; China is buying a lot, but skim milk powder imports are not as strong as expected. There is also a trend towards organic and eco-friendly products. Even though inflation is making things more expensive, and exchange rates are shifting, the dairy market is staying strong. In 2025, global milk supply is expected to grow by 0.8%, thanks to cheaper feed and better weather. The USDA says U.S. milk production will be at 227.2 billion pounds, the EU at 149.4 million metric tons, and Argentina is showing recovery. New Zealand is also slightly increasing production by expanding herds. Trade is adapting due to these production changes and demand patterns.

Key Takeaways:

  • The U.S. experienced a 1.0% drop in milk production, largely impacted by a significant decline in California.
  • EU milk production rose by 2.0%, surpassing forecasts for the second month in a row, indicating strong regional growth.
  • Argentina’s dairy production increased by 4.4% year-over-year in December, showcasing resilience and expansion.
  • Global dairy demand is varied, with China maintaining strong import levels, while other regions show reduced demand, particularly for skim milk powder.
  • U.S. dairy farmers may need to adopt new strategies focusing on efficiency and market diversification to remain competitive amidst shifting global dynamics.
dairy industry trends, organic dairy products, sustainable dairy practices, global milk production, dairy market resilience

Shifting consumer preferences, particularly towards organic and sustainable dairy products, are causing significant changes in the dairy industry. This trend is compelling producers to adopt more eco-friendly practices and be transparent about their product sourcing. Additionally, the growing popularity of plant-based alternatives is prompting producers to diversify their product offerings, thereby reshaping the industry landscape. 

Despite economic issues like inflation and changing exchange rates, the global dairy market remains resilient. Inflation may raise production costs, but it does not deter producers from their commitment to quality. Changes in exchange rates may affect international trade, but they also present opportunities for innovative sourcing and pricing strategies.

Global Milk Production Trends

RaboResearch forecasts a 0.8% growth in milk supply from the major exporting regions in 2025. Affordable feed costs and improved weather conditions support this growth. However, the picture varies significantly across different regions:

  • United States: The USDA projects milk production at 227.2 billion pounds for 2025, a 0.8 billion pound decrease from earlier forecasts. This reduction is due to lower-than-expected milk per cow yields and adjustments in dairy cow inventories.
YearProjected Milk Production (Billion Pounds)
2025227.2
2026229.0
2027231.1
2028233.5
2029235.8
2030238.1
  • European Union: EU milk production is forecast to decline marginally to 149.4 million metric tons (MMT) in 2025, down from 149.6 MMT in 2024. This decrease is attributed to declining cow numbers, tight farmer margins, environmental regulations, and disease outbreaks.
  • Argentina: After facing challenges in 2024, Argentina’s dairy sector shows signs of revival. In November 2024, milk production increased by 1.5% yearly, the first growth in 18 months. The industry is benefiting from improved producer economics and government policies that have reduced inflation and improved access to financing.
  • New Zealand: Milk production is expected to increase slightly, with farmers expanding herds and improving feed and management practices in response to higher global dairy prices.
Region2024 Production (MMT)2025 Forecast (MMT)% Change
EU-27149.6149.4-0.13%
USA228.0227.2-0.35%
ChinaData not availableMarginal growthN/A
New ZealandData not available21.3N/A

The expected drop in U.S. milk production by 0.35% by 2025, compared to the steady production in the EU-27, shows a shift in the global dairy market. This trend suggests that U.S. farmers need to be more efficient and ready to compete with other countries that have stable or growing milk production. These changes might also alter trade patterns, with countries like New Zealand keeping their strong position and China adjusting its imports. Making local changes and smart market decisions will be crucial for dealing with these changes. 

Trade Dynamics

The global dairy trade landscape is evolving in response to production shifts and changing demand:

  • United States: Dairy exports on a milk-fat basis are forecast to increase to 11.9 billion pounds in 2025. However, exports on a skim-solids basis are expected to decline due to less competitive pricing for dry whey and nonfat dry milk.
  • European Union: Cheese production remains the primary focus of the EU dairy processing industry, supported by solid domestic consumption and continued export demand. EU27 cheese production in 2025 is forecast to reach 10.8 MMT, up by 0.6% from 2024.
  • China: Imports of fluid milk, whole milk powder, and skim milk powder are forecast to continue declining in 2025 due to higher domestic milk production. Cheese imports are also expected to decline due to decreased demand for processed cheese.
YearAll-Milk Price Forecast (USD/cwt)
202519.20
202619.00
202719.10
202819.30
202919.50
203019.70

The global dairy trade is changing, bringing both challenges and opportunities. The European Union and Argentina are doing well because they are producing more milk. This means they can sell more dairy products around the world and make good profits, especially in places where people are buying more dairy. 

On the other hand, U.S. dairy farmers might struggle if they don’t keep up with these changes. Milk production in the U.S., especially in California, is down. This could make it harder for American farmers to compete with countries that are growing fast. U.S. farmers might need to find ways to be more efficient and control costs to stay competitive in the global market. 

Some countries might face problems because they can’t quickly adjust to changing global demand for dairy. These countries might have to pay more or find it harder to get dairy products. However, new ways to produce dairy and working together with other countries might help solve some of these issues.

Consumption and Demand Patterns

Global dairy demand remains mixed amid economic pressures. China, a key player in the worldwide dairy market, is expected to see a rebound in dairy imports:

  • China: Dairy import volumes are projected to grow by 2% year-on-year in 2025, reversing a three-year decline. This potential recovery follows a steep 17% drop in net dairy product imports during the first eight months 2024.
Product2024 Imports2025 ForecastTrend
Whole Milk Powder2.0 million tons2.1 million tonsUpward
Skim Milk Powder1.5 million tons1.55 million tonsUpward
Cheese0.5 million tons0.51 million tonsUpward
Butter0.3 million tons0.31 million tonsUpward
  • European Union: Domestic consumption of fluid milk is expected to continue declining, forecast at 23.5 MMT in 2025, down by 0.3%.

In recent times, more people are choosing different kinds of milk and new dairy products. Plant-based milks, like almond, soy, and oat, are becoming popular because they are seen as healthier and better for the environment. This change shows how people are leaning towards eating more plant-based foods. 

At the same time, more people want dairy products that are good for health. Many are picking products high in probiotics, protein, and vitamins. This trend shows a focus on staying healthy and strong, which is changing how people buy dairy. 

Concerns about the environment are also affecting how people shop. Many are aware of the impact of traditional dairy farming, like greenhouse gas emissions and water use. Because of this, there’s a bigger demand for dairy and alternatives made in environmentally-friendly ways, leading producers to go green and make eco-friendly choices.

Key Challenges and Opportunities

  1. Environmental Regulations: Dairy farmers, particularly in the EU, face increasing pressure from environmental regulations, which may limit production growth.
  2. Economic Pressures: Tight margins and economic uncertainties challenge dairy farmers globally, leading to industry consolidation in some regions.
  3. Market Diversification: With changing global demand patterns, producers and exporters may need to explore new markets or niche opportunities.
  4. Technology Adoption: Investments in technology and sustainable practices are helping some farmers improve yields while managing costs.
  5. Trade Uncertainties: An increasingly complex geopolitical environment and protectionist policies present risks to the stability of global dairy markets.

The Bottom Line

The global dairy industry is changing a lot, with different production levels, trade shifts, and demand from various regions. U.S. milk producers are facing challenges as competitors in Europe and Latin America grow stronger. This means U.S. dairy farmers need to work on being more efficient and find new market opportunities to stay ahead. Looking ahead to 2025 and beyond, there’s a chance for growth for those who are ready to adapt and use new technology, focusing on being sustainable and innovative.

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China’s Dairy Imports Expected to Surge in 2025, Ending Three-Year Slump

Find out how China’s increase in dairy imports in 2025 might change global markets. Could this comeback open new chances for farmers around the world? Learn about the effects now. 

Summary:

The article explores China’s anticipated rebound in dairy imports in 2025 following a three-year decline. With a projected 2% year-on-year growth and a specific 6% increase in Whole Milk Powder imports, this shift could significantly alter global dairy markets. China’s domestic milk production is declining, contributing to lower farmgate milk prices and industry consolidation. Meanwhile, global milk supply from leading exporters is expected to rise by 0.8%. These factors suggest a potential balance in global dairy supply and demand. Despite this, China’s economic challenges and low consumer confidence may hamper a full recovery in dairy consumption, prompting caution among industry stakeholders.

Key Takeaways:

  • China is expected to see a 2% annual increase in dairy imports in 2025.
  • Whole Milk Powder (WMP) imports are projected to reach 460,000 metric tons in 2025, indicating a 6% growth.
  • Chinese milk production decreased by 0.5% in 2024 and is predicted to drop by 1.5% in 2025.
  • Low farmgate milk prices in China, close to 10-year lows, have reduced herds and farm closures.
  • Global milk supply from major exporting regions is expected to grow by 0.8% in 2025
China dairy imports, milk production decline, global dairy market impact, whole milk powder imports, economic pressure on dairy farmers

China’s import growth could increase demand for various dairy products, impacting global markets.

According to a recent Rabobank report, China’s dairy imports, which had been decreasing for three years, are forecasted to rise in 2025. This change could strongly affect global dairy markets and prices, bringing hope to farmers who have experienced lower demand from the world’s largest dairy importer. 

China’s Dairy Market At a Crossroads: A Pivotal Moment Amidst Rebound 

China’s dairy sector is undergoing a significant transformation, signaling a profound shift in its dairy import practices. Milk production fell by 0.5% in 2024, and experts say it will drop by another 1.5% in 2025, according to Rabobank predictions. This drop matches consumer demand, meaning dairy imports could increase by 2% in 2025. China is changing to deal with supply problems and meet consumers’ wants. This shift in China’s dairy market is set to impact global dairy markets considerably, potentially influencing prices and trade dynamics significantly. 

The expected increase in China’s dairy imports in 2025 represents a notable departure from historical trends. The projected 2% increase in imports for 2025 contrasts with the substantial amounts purchased in 2021, where China acquired around 3.95 million tons of dairy products. In 2023, imports fell by 12% to 2.6 million tons. The predicted 6% rise in whole milk powder (WMP) imports to 460,000 metric tons in 2025 is still below the average of the last ten years. This shows how China’s dairy market has been up and down over the past ten years and hints it might be settling down at lower levels than before.

YearDairy Imports Growth (%)Whole Milk Powder Imports (metric tons)Chinese Domestic Milk Production Change (%)
2023-8%430,000-0.5%
2024-5%435,000-0.5%
20252%460,000-1.5%

Domestic Struggles Propel China’s Dairy Import Surge

These domestic challenges have increased the economic pressure on Chinese dairy farmers, making it harder for them to keep up production levels. Small to medium-sized farms are struggling, leading to more farms joining together. This shows not only the struggles of individual farmers but also a significant change in the country’s farming scene

Lower milk production in China is a key reason for the increase in dairy imports. Persistent economic challenges, such as low consumer confidence, exacerbate this decline and hinder recovery initiatives. The situation is primed for a significant shift, and problems at home might offer international dairy producers a chance to step in and meet the rising demand. 

Global Dairy Dynamics: A World of Change Amid China’s Growing Demand

As China’s demand for dairy imports grows, the world will increase milk production to meet this rising demand. Rabobank says the milk supply will increase by 0.8% by 2025. This is important because all the significant milk-exporting areas are expected to grow simultaneously for the first time since 2020. This could help balance the world dairy market, with supply and demand coming together well.

Whole Milk Powder Imports: A Shifting Landscape for China

China imports a lot of whole milk powder (WMP) and is expected to increase by 6% to 460,000 metric tons in 2025. This shows that China is changing how it buys dairy products, which could affect global markets that depend on these imports.

Economic Challenges and Consumer Sentiment in China’s Dairy Landscape

While there is optimism for an increase in China’s dairy imports, several notable economic challenges remain. The main problems are low consumer confidence and weak income expectations, which cause people to spend less on dairy products. As the middle-class expansion in China slows, less extra money is available to buy more dairy products, making it harder for the market to bounce back. 

Amidst the challenges, a ray of hope shines through. Rabobank predicts a slight increase in dairy consumption in 2024 and a projected drop in domestic milk production. This could lead to a surge in imports. With China’s milk output potentially decreasing by 1.5% in 2025, there could be a greater need for imports to meet consumer demands, offering a promising outlook for the future market. 

The delicate balance between local constraints and global market trends suggests a cautious but optimistic view for those observing China’s dairy market recovery. Recognizing these economic factors is essential for effectively navigating evolving market dynamics and capitalizing on new prospects for global dairy sellers and producers.

The Bottom Line

As the world’s largest dairy importer, China’s resurgence in the dairy market presents a promising opportunity for farmers worldwide. This expansion has the potential to reshape the market landscape significantly, opening up novel and enticing avenues for global dairy product sales. Farmers facing reduced demand from China can now ramp up production and explore new product markets, igniting a sense of excitement and motivation for the future. 

How could this change help your dairy business? What plans do you have to take advantage of this change?  

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Global Dairy Trade Up 1.4% as Chinese Imports Surge 30.6%: Market Shifts Ahead

See how slight increases Global Dairy Trade results and increasing Chinese imports affect farmers. How can they adjust to market changes and grab new chances?

Summary:

Global Dairy Trade auction results show a 1.4% increase, worrying farmers due to lower Skim Milk and Whole Milk Powder prices. Despite this, China increased its dairy imports by 30.6% in December, which might help boost global demand and support milk prices. While cheese prices are steady, future increases in cheddar production could lower prices. Managed money is betting on higher milk prices in Class III futures, indicating optimism and stable whey prices are helping farmers. However, the butter market is struggling, which could affect Class IV milk prices. Futures of nonfat dry milk (NFDM) suggest a tight supply, which could stabilize prices. Farmers must combine short-term actions with long-term planning to effectively handle these market shifts.

Key Takeaways:

  • Recent GDT auction results showed a 1.4% increase, raising potential concerns over farm-gate milk prices.
  • Chinese dairy imports surged by 30.6% in December, suggesting increased global demand, which may bolster milk prices.
  • The cheese market remains stable within a neutral trading range, but future increases in cheddar production might pressure prices.
  • Managed money’s increased long positions in Class III futures imply potential bullish trends for milk prices.
  • Stable whey prices benefit farmers, yet the butter market’s challenges could affect Class IV milk prices.
  • NFDM market dynamics indicate potential supply tightness that could support milk prices.
  • Dairy farmers must stay informed on market trends, balancing short-term strategies with long-term production and demand changes to succeed.
dairy market dynamics, global dairy trade, Chinese dairy imports, milk prices, dairy farmers strategies

Have you ever wondered how dairy farmers worldwide are coping with the shifting dynamics of the global dairy market? A 1.4% increase in Global Dairy Trade (GDT) auction results and a 30.6% increase in Chinese dairy imports in December show how unpredictable the market can be. Due to their substantial roles in the global dairy market, these changes have significant implications for key regions such as the U.S. and China. Farmers must strategize using short-term plans to manage risks while considering long-term market trends. They should proactively seek opportunities such as diversifying product offerings and exploring new markets as demand and prices change.

This slight increase was primarily attributed to significant price drops in Skim Milk Powder (SMP) and Whole Milk Powder (WMP), which plummeted by over 2% due to oversupply issues in the market. This drop could mean less money for dairy farmers who sell these products, as they would earn less from the same amount of milk powder. This is worrying because it could lower milk prices from the farm. Dairy farmers, who need steady prices, might face money problems if these price drops keep happening. Falling SMP and WMP prices could lower the value of milk sales, hurting profits. But there’s hope. In the U.S., Nonfat Dry Milk(NFDM) futures are priced higher than world rates. This could protect U.S. producers from specific global price decreases. The GDT auction results show worrying trends in milk powder prices. Still, the higher U.S. NFDM futures help give some protection to American dairy farmers facing global trade challenges.

ProductPrice Change (%)Current Price (USD)
Whole Milk Powder (WMP)-2.5%$1,200
Skim Milk Powder (SMP)-2.1%$1,210
Butter-1.8%$4,450
Cheddar+0.5%$3,500
Nonfat Dry Milk (NFDM)+1.2%$1,135

Chinese Dairy Imports

China’s unexpected 30.6% surge in dairy imports in December could bring hope to the global dairy market. As one of the largest dairy buyers, China’s increased demand could help stabilize milk prices, offering a glimmer of optimism to dairy farmers who have been grappling with recent price drops at the Global Dairy Trade auctions. This surge in demand from China could lead to a more stable global market, which would benefit dairy farmers worldwide. However, it’s crucial to ascertain whether this is a one-time occurrence or the beginning of a sustained trend. 

The world closely monitors China’s buying habits because the country substantially influences supply and demand, directly shaping global market dynamics. Prices could increase if China keeps buying more milk and other dairy products. Yet, if this surge is short-lived, an oversupply issue could lead to lower prices in the market. 

It is imperative to closely monitor China’s production and consumption patterns, as they directly influence future imports and market trends, shaping the dynamics of the global dairy industry. Dairy farmers can proactively handle potential market changes by monitoring these trends and adjusting their plans accordingly. Given the significant impact of China’s dairy import patterns on global markets, a combination of short-term vigilance and long-term planning is essential for navigating these changes.

Analyzing the Cheese Market

The Class III and cheese futures market is currently stable, with Class III prices between $1.80 and $1.90 per hundredweight and cheese futures prices at $1.80 per pound. This stability assists dairy farmers in planning effectively. This results from avoiding excess cheese in the market, ensuring a balance between supply and demand. This steady supply is crucial because it keeps prices from dropping too low. Reasons for this balance include a drop in U.S. milk production—which hasn’t been this low since the 1960s—strong cheese exports like mozzarella and gouda, and milk being used more for drinks as schools reopen. 

But, significant changes are coming in 2025 due to around $8 billion invested in new cheddar plants. This investment could boost cheese production by about 6% of the current annual production. Failing to align increased cheese production with a rise in consumer demand may result in an oversupply of cheese, leading to downward price pressure in the market. For instance, historical data shows that similar oversupply situations have caused a significant decline in dairy farmers’ profitability. Dairy farmers need to be ready for these changes in the market.

Class III Futures and Whey Market Dynamics

The increase in bets by investors on Class III futures, driven by factors such as favorable weather conditions and increased export demands, suggests a positive outlook for milk prices shortly. Some experts think milk prices might go up soon, and if they are correct, dairy farmers could earn more money. This increase in bets on Class III futures indicates a potential increase in milk prices, which would benefit dairy farmers as they would receive more revenue for the same quantity of milk. However, the market must turn out as experts predict. 

At the same time, whey prices have stayed steady in the low to mid-70s due to strong demand for protein. This is advantageous for dairy farmers, as whey prices directly influence milk prices and serve as a crucial indicator of the broader dairy market dynamics, shaping producers’ revenue and market stability. Still, future demand isn’t apparent, with less trading in longer-term contracts. Farmers should watch these changes, looking for short-term wins while being ready for possible changes in what the market wants.

Butter Market

The butter market faces challenges, including a recent price drop and increased selling activity, indicating potential instability in butter prices. These changes can affect Class IV milk prices since they rely significantly on butter prices. Last week, spot butter prices fell by 8.25 cents, leading to more people selling futures. This shows that people are losing confidence in butter prices, which could push Class IV milk prices down, hurting dairy farmers’ earnings. 

Dairy farmers specializing in butterfat production must closely monitor these changes to adapt their strategies and mitigate potential financial risks. Because the market is unstable, these farmers might need to rethink their financial plans and risk strategies to avoid losing money. Staying abreast of market trends is essential for making informed decisions and maintaining financial stability amidst the challenges in the current market environment.

NFDM Market Dynamics

The NFDM market currently has spot prices higher than future prices, indicating a potential shortage in supply to meet the current demand. Raising milk prices could benefit dairy farmers but also requires careful planning. 

The shortage of NFDM supply, reflected in elevated spot prices, creates opportunities and challenges for farmers. Farmers must also plan for future uncertainties, which might lead to immediate profits. Dairy farmers can protect their businesses and increase profits by making the most of the current market and preparing for price changes.

Navigating the Complex Dairy Market

The recent 1.4% increase in the Global Dairy Trade auction is concerning as it indicates declining prices for Skim Milk Powder and Whole Milk Powder. If this trend continues, it could hurt farmers’ earnings from selling milk. In addition, the butter market is also facing trouble, with dropping prices possibly affecting Class IV milk values. 

But there is also some good news. Chinese dairy imports shot up by 30.6% in December. As China is one of the largest dairy buyers, this increase could help keep global milk prices steady. Also, more people are betting on an increase in Class III futures, which suggests milk prices could rise. 

Dairy farmers must remain vigilant and adaptable in continuously managing their risks. They should closely monitor short-term changes, such as the price of butter and milk powder, and long-term trends, such as changes in production and demand worldwide. By adopting innovative strategies such as diversifying product offerings and exploring new markets, farmers can seize immediate opportunities and shield themselves from future market challenges.

The Bottom Line

As changes continue in the dairy market, farmers need to stay alert. The recent slight increase at the Global Dairy Trade auction showed drops in Skim Milk Powder and Whole Milk Powder prices, highlighting the need for thoughtful planning. However, with a rise in Chinese dairy imports and positive signs in Class III futures, there are still chances to profit. It’s essential to watch new cheese factories, Chinese demand, and trends in protein and butter markets. Farmers can deal with uncertainties and use insights to balance short-term plans with long-term growth by staying well-informed and flexible. The message is clear: farmers should remain proactive and take opportunities in a changing global dairy market.

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U.S. Butter Consumption Soars to 60-Year High as Production Breaks Records

Find out why U.S. butter use is the highest in 60 years. How are dairy farmers keeping up with the demand? Learn about the trends changing the butter market.

Summary:

The U.S. butter industry is booming, with consumption and production reaching unprecedented heights in many years. In 2023, each American used an average of 6.5 pounds of butter, the most since 1965. In 2024, this trend continued, with an 11.2% rise in domestic consumption. While overall production increased by 4.4%, California, the top butter-producing state, saw a significant drop due to less milk production and an avian flu outbreak. Other states made up for this drop, leading to a potential record year of output for 2024. However, imports are also up, and butter reserves are decreasing, showing a strong demand. Butter now uses 18% of the U.S. milk supply, highlighting its growing role in the dairy industry. This means new chances and challenges for dairy farmers who need to keep up with herd management and production trends.

Key Takeaways:

  • Average U.S. butter consumption reached 6.5 pounds per person in 2023, the highest since 1965.
  • U.S. butter production in 2024 could set a new record, exceeding the previous peak of 2.15 billion pounds in 2020.
  • California’s butter production declined significantly due to reduced milk production and an avian influenza outbreak.
  • Despite high production, U.S. butter imports surged by 27% from 2023, demonstrating robust consumer demand.
  • Butter stocks have decreased by 20% from the previous month, nearing historic lows compared to the five-year average.
  • Consumer preference for natural dairy fats drives the continued demand for butter, impacting future dairy farming strategies.
  • The butter sector now utilizes 18% of the U.S. milk supply on a milkfat equivalent basis, indicating its growing importance in the dairy industry.
butter consumption, U.S. butter production, dairy farmers, milk supply, butter imports

On an unexpected rise, American dairy farmers are seeing a significant increase in butter consumption and production, hitting record levels in 2023 and 2024. This trend, with an average consumption of 6.5 pounds per person—the highest since 1965—shows an 11.2% jump in domestic butter consumption in October 2024 alone. Across the U.S., these numbers highlight a renewed consumer desire for butter, setting up for what might be a record-breaking year in U.S. butter production.

YearButter Consumption (Pounds Per Capita)
19656.0
20135.4
20205.8
20236.5

National Butter Production Nears Historic Heights Amidst Regional Struggles 

YearProduction (Billion Pounds)Percentage Increase from Previous Year
20202.15N/A
20212.202.3%
20222.18-0.9%
20232.253.2%
20242.20 (Est. through November)-2.2%

Butter production in the United States has been rising, with a 4.4% increase to 170.8 million pounds in November 2024. This puts 2024 close to breaking the record for U.S. butter production, which was near 2.20 billion pounds through November. 

However, not all areas are the same. California, usually a top butter producer, faced setbacks, with a 12.8% drop in production, making only 45 million pounds in November. This was mainly due to a 9.2% fall in milk production and an avian influenza outbreak, which hurt the state’s ability to produce butter. This caused California’s share of the national butter production to decrease. 

Other states have stepped up their butter production by 12.4% to compensate for California’s reduced output. When Pennsylvania is not considered, these states exhibit a growth rate of 13.1%, demonstrating their resilience and capacity to meet the nation’s butter requirements despite regional challenges.

Market Dynamics: Rising Imports and Declining Stocks Suggest Elevated Demand

YearButter Imports (Million Pounds)Percentage Increase from Previous Year
2021130.5
2022160.723.1%
2023174.98.9%
2024 (Jan-Nov)204.416.8%

Butter imports have risen even with high domestic production. Domestic producers struggle to meet the increased demand for holiday baking and cooking in the fall and winter. On top of that, international trade impacts imports. Changes in global dairy prices and trade agreements influence the decision to import butter as countries offer competitive prices to the U.S. This shows a complex situation where demand and global factors lead to more butter imports. 

At the same time, a 20% drop in butter stocks over the past month highlights another vital market trend. This significant decrease in inventory shows strong consumer demand that outpaces the available supply. The low stock levels are nearly 54 million pounds below the five-year average, demonstrating how intense and ongoing this consumption boom is. 

High imports and declining stocks point to a market with robust demand. Consumers’ fondness for butter remains strong, even in the face of higher prices. For farmers and industry professionals, this presents a promising future. The high demand could stimulate the development of new production capacity and innovative marketing strategies to retain and attract new market segments.

Analyzing the U.S. Butter Market: Trends, Production Dynamics, and Opportunities for Growth

The U.S. butter market is growing fast, showing significant trends and effects for the dairy industry. Let’s look at the main points: 

  • Americans are eating more butter than ever. Per person, butter use hit 6.5 pounds in 2023, the most since 1965. In October 2024, butter use increased by 11.2% to 217.4 million pounds. This shows that people like natural dairy fats, even with higher prices. 
  • Butter production in the U.S. is also increasing. In November 2024, production reached 170.8 million pounds, or 4.4% more than the year before. By November 2024, total production was an impressive 2.20 billion pounds, aiming for a record year. 
  • Despite making a lot of butter, the U.S. imported a record amount. From January to November 2024, it imported 204.4 million pounds, 27% more than in 2023 and 56.7% more than in 2021. 
  • Butter stocks are lower than they were in November. They were 214 million pounds, down 20 percent from the previous month and 54 million pounds below the five-year average.  

The U.S. butter market is not just growing, it’s thriving. With record production, more imports, and high consumer demand, the industry is ripe with opportunities for dairy farmers to improve their market position. This growth trajectory paints a promising picture for the future of the butter industry, instilling a sense of optimism among industry professionals and stakeholders. 

Industry Impact: The Growing Significance of Butter in Dairy Supply Chains

The growing butter market now uses 18% of the U.S. milk supply, showing its significant role in the dairy industry. This high demand for butter presents challenges and opportunities for dairy farmers. Farmers must consider changing how they manage their herds and choosing breeding methods focusing on milk with more butterfat to produce more butter. 

Consumers’ preference for natural dairy fats over processed ones is a significant driver of the butter industry’s growth. This trend empowers dairy farmers to align their herd care and milk quality with consumer preferences. As more people opt for butter, farmers can consider breeds better at producing milk with high butterfat, shaping the industry to meet current demand. 

With strong consumer demand, dairy farmers can make more butter. This can be profitable but also challenging. Strategies like improving how dairy plants run, enhancing feed quality, and using better milking techniques will be key to growing production. 

For farmers, it’s a time of change. There’s a push to produce the most without sacrificing quality, which might mean investing in new technology and facilities. As the industry changes, matching herd management strategies with consumer preferences meets current demand. It helps ensure long-term success and sustainability in the butter market.

Future Projections: Innovations and Expert Insights Shaping the Butter Industry

 Experts in the dairy field think that butter production and demand will continue to rise. This is due to new milking technologies and improved herd management. Automated milking systems and data tools are helping farmers produce more and better-quality milk, which meets the rising consumer demand for butter. Dr. Emily Howard, an agricultural economist, says, “Technological changes are reshaping dairy operations, allowing farmers to boost efficiency and meet growing butter market demand.” 

These new tools let producers make more milk, which leads to more butter. Farmers can increase their output while following environmental rules using eco-friendly practices like careful farming and eco-friendly feed options. This shift towards tech-driven and sustainable farming might create new opportunities for dairy farmers and lead to more growth in the butter industry. 

Automated systems help improve efficiency and production, while data-driven methods enhance milk quality. Careful farming supports eco-friendly practices. As these technologies become more widespread, the U.S. dairy industry is expected to improve its position in the global butter market, creating a more substantial production base. Analysts think these advancements might also reduce production costs, making U.S. butter more locally and worldwide competitive.

The Bottom Line

As butter consumption in the U.S. reaches its highest levels in almost sixty years, the industry has a big chance to grow. In 2023, people ate an average of 6.5 pounds of butter each, expected to rise in 2024. This ever-increasing demand makes the market stronger. It allows American farmers and butter makers to earn more money and expand their market. They can improve production and increase exports by using advanced methods to produce more milk. This growth can continue by focusing on butter’s great taste and health benefits. A steady milk supply supports this growth and keeps the U.S. butter market strong at home and abroad.

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Global Dairy Market Recap: Mixed Signals and Opportunities – January 20, 2025

Discover the changing trends in the global dairy market. How can farmers handle price changes, production shifts, and new opportunities to boost their profits?

Summary:

The Global Dairy Market Reports for the week ending January 20, 2025, reveal a mixed situation for dairy farmers worldwide. Market prices are going up and down, with European butter and skim milk powder (SMP) prices falling, but Singapore Exchange (SGX) futures are showing a rise in whole milk powder (WMP) and SMP prices. U.S. milk production forecasts have been lowered, which might help increase dairy prices. Europe sees drops in milk production in Germany but increases in France and Italy. Challenges include rising feed costs and disease outbreaks in Europe, while opportunities arise from tight milk supply and new developments in the industry. Farmers should monitor trends, manage costs, and seize opportunities to stay ahead in this changing market.

Key Takeaways:

  • The dairy market outlook is mixed, with downward and upward trends affecting various regional segments.
  • European futures show declines in butter and SMP prices, while SGX futures indicate positive trends, particularly in WMP and SMP prices.
  • Milk production variability in Europe, with declines in Germany and increases in countries such as France and Italy, impacts global supply and pricing.
  • The USDA’s lowered forecasts for US milk production could bolster prices, offering some relief to farmers amidst other challenges.
  • Disease outbreaks in Europe, notably Germany, could disrupt local markets and create export opportunities for unaffected regions.
  • Rising feed costs remain a significant concern that could pressure profit margins if milk prices do not keep pace with expense increases.
  • Opportunities arise as tight milk supply and new cheese plant openings in the US may lead to competitive demand and potentially higher farm-gate prices.
  • Farmers are advised to closely monitor market trends, manage feed costs diligently, and seize emerging opportunities to optimize outcomes.
dairy industry trends, European butter prices, Skim Milk Powder prices, milk production forecasts, dairy market strategies

As of January 20, 2025, the global dairy industry is in flux, presenting farmers with challenges and opportunities. Market prices and milk production in Europe and the US are changing due to disease threats, rising feed costs, and evolving market demands. European butter and Skim Milk Powder (SMP) prices are decreasing, and US milk production forecasts for 2024 are subdued. Farmers should actively monitor market trends, manage feed costs efficiently, and capitalize on supply changes and disease impacts.

Market SegmentEEX Prices (Jan-Aug 2025)SGX Prices (Jan-Aug 2025)
Butter€7,208 (down 0.6%)$6,448 (up 0.3%)
SMP€2,644 (down 0.7%)$2,930 (up 3.6%)
Whey€965 (down 2.6%)Not Available
WMPStable$3,883 (up 4.0%)

Uneven Terrain: Navigating Mixed Market Price Trends in the Dairy Industry

The global dairy market shows positive and negative price trends that could affect farmers’ earnings. Butter and Skim Milk Powder (SMP) prices are decreasing in Europe. Butter futures are down 0.6% to €7,208, and SMP futures are down 0.7% to €2,644. These decreases could concern farmers who depend on these products for income, as reduced prices may lead to profit reductions. 

In contrast, the futures market operated by SGX presents a more optimistic outlook, particularly for Whole Milk Powder (WMP) and SMP. WMP prices rose 4.0% to $3,883, and SMP went up 3.6% to $2,930. These increases may help balance out the weaker European market. Farmers need to watch these changes closely. They might need to adjust their production plans or find better markets to take advantage of higher prices while dealing with lower prices in other areas.

Region/ProductButterSMPWMPWhey
European EEX Futures-0.6% (€7,208)-0.7% (€2,644)N/A-2.6% (€965)
SGX Futures+0.3% ($6,448)+3.6% ($2,930)+4.0% ($3,883)N/A
EU Quotations+0.8% (€7,413)-1.7% (€2,522)0% (€4,446)-0.8% (€873)

The Shifting Landscape

Milk production in Europe is showing different trends in various countries. Germany experienced a decrease in milk production, with November’s output declining by 1.9% compared to the previous year. This decrease might make the milk supply tighter across Europe. Meanwhile, France, Italy, and Denmark have increased production. In November, France was up by 1.8%, Italy by 1.9%, and Denmark by 0.7% year-over-year. 

These differences could affect global milk supply and prices. Decreasing Germany’s production could lead to higher prices if demand remains high. However, more milk from France, Italy, and Denmark might balance things out, preventing a significant price jump. This could also trigger increased competition among countries as they seek to sell more milk globally. However, this competition could also lead to better prices for farmers, offering a glimmer of hope amid market changes and a potential for increased profits. 

Strategic planning is crucial for dairy farmers in the current market landscape. If Germany’s milk production remains low, farmers can benefit from higher prices or adjust their costs if there’s an excess of milk elsewhere. These changes underscore the importance of strategic planning in navigating the milk market, with price fluctuations and European production shifts influencing global milk sales. By carefully monitoring these changes, farmers can make informed decisions to safeguard their businesses, empowering them to take control of their operations.

Forecasting the Future: USDA’s Revised Milk Production Projections and Their Impact on Dairy Prices

Statistic2024 Forecast2025 Forecast
US Milk Production (million tonnes)102.4103.1
% Change from Previous Year-0.2%+0.3%
US Milk Production per CowSlower Growth
Fat Basis ExportsIncrease
Milk Supply Tightness ImpactPotential Support for Prices

In a significant change that might help US dairy farmers, the USDA lowered its predictions for milk production in 2024 and 2025. The latest report expects US milk production in 2024 to drop by 0.2% from 2023, going from 102.6 million tonnes to 102.4 million tonnes. The 2025 prediction is also down from 103.4 million tonnes to 103.1 million tonnes. This adjustment is attributed to a decrease in the growth rate in milk production per cow. 

Reducing milk production could lead to more stable or higher prices for dairy farmers. Typically, a decrease in milk supply, coupled with steady or increasing demand, can drive prices up. Lower production forecasts could help farmers navigate changing market conditions, fostering a more balanced market with predictable prices.

Experts are also examining how these forecasts might affect dairy markets. Farmers who have struggled with low profits due to too much supply could benefit from these changes. They might encourage sustainable production and allow farmers to invest in technology and improvements. Steady prices can help farmers now and in the future by reducing industry unpredictability. 

As the situation develops, industry personnel must monitor how changes in production might affect their plans and finances. This vigilance is key for everyone involved in the dairy supply chain, as it helps maintain balance in the face of shifting market dynamics.

Navigating Headwinds: Addressing Dairy Market Challenges Amidst European Disease Concerns and Rising Feed Costs

The European dairy market is facing significant challenges right now. One crucial issue is Germany’s foot-and-mouth disease outbreak, which has repercussions for many other countries. This disease could prevent the exporting of German products, affecting many German farms. As a result, European importers might avoid buying German products for a while, making the market even more unstable. Nevertheless, this scenario allows unaffected countries to increase their dairy product exports, potentially reshaping global market dynamics. 

Simultaneously, dairy farmers are contending with escalating feed expenses. Corn and soybean prices are going up because of expected smaller harvests. This rise presents difficulties for farmers in maintaining profits unless dairy product prices also increase. This situation is extra challenging for small farms, which might not be able to handle the higher costs as easily. So, dairy farmers need to closely monitor these costs and look for different feed sources to help ease some of the pressure from the high prices.

Seizing Potential: Embracing New Opportunities in the Dairy Sector Amidst Supply Challenges

The current dairy market offers good opportunities for farmers, especially in the United States. One key reason is the low supply of milk in the area. This shortage can increase milk’s value, raising farm-gate prices as processors compete to get enough. The establishment of new cheese plants has contributed to improving this situation. 

As a result, these new cheese factories require milk to fulfill their production targets, boosting the demand for milk. With the rise in competition, dairy farmers might have improved bargaining power, resulting in increased profits and enhanced financial outcomes. This instills hope for improved economic outcomes, providing a sense of optimism for the industry’s future. 

Also, the expanding cheese industry could lead to more investments and advanced farming methods to get more milk. This could help individual farmers by increasing the demand for their products and improving the industry. These changes might bring short-term benefits and promote long-term growth and strength in the dairy sector, creating a more robust and competitive market for dairy farmers.

Maximizing Advantage: Strategic Insights for Dairy Farmers Amid Evolving Market Dynamics 

Given the current market conditions, dairy farmers can take innovative steps to improve their businesses and make more money. Even though market prices are changing, there are good opportunities, mainly where diseases affect the local supply. This opens the door to exploring new export markets with higher demand. By keeping up with global market news and adjusting their export plans to match areas facing supply issues, farmers can stay informed and prepared for potential market shifts. 

Also, as feed costs increase, managing feed carefully becomes very important. By looking at feed efficiency and cutting down on waste, farmers might keep or even improve their profits. Investing in technology that tracks feed quality and cow health can save money and boost productivity. Farmers could also consider having more product options, like getting into cheese production, since new US processing plants are increasing demand. By understanding these evolving factors, working with partners, and exploring new markets, farmers can effectively adapt to market fluctuations. 

Working with industry experts and staying involved in commodity futures can help farmers protect against price changes. Tools like futures and options contracts can guard against bad prices and ensure a steady income. As the market changes, focused management and an ongoing focus on efficiency will be key to sustainable growth in the dairy industry.

Expanding Global Horizons: Interconnected Trends Across Major Dairy Markets

When examining dairy markets worldwide, it’s essential to include countries other than Europe and the United States. New Zealand is a key player known for its significant dairy exports. Recent reports show a steady increase in its Whole Milk Powder (WMP) exports, which are in strong demand from markets like China. However, Fonterra’s lower Global Dairy Trade (GDT) volumes highlight the effects of weather changes on production. 

In India, the world’s biggest dairy producer, a growing middle class with more money to spend is leading to more dairy consumption. This leads local processors to expand their operations to meet various dairy product demands. India’s government also supports value-added dairy production, which is expected to change the industry. 

China, a primary import market, needs more dairy to satisfy colossal consumer demand. China focuses on food safety and quality, making it a significant player in the global dairy trade

“The connection between these markets is powerful,” says an international trade analyst, Dr. Luo Ming. “Events in one area can affect prices and supply in others. For example, production problems in New Zealand can change prices in China and India.” These links show how complex the dairy business is. Rising demand in one place can lead to more exports, while production issues elsewhere can raise global prices. Understanding these changes is essential for those in the dairy industry.

The Bottom Line

The global dairy market offers challenges and opportunities. European futures show lower butter and SMP prices, which might affect earnings. In contrast, SGX futures suggest stable prices, which could help balance potential losses. Changes in milk production across Europe add another layer, influencing global supply and prices. 

The USDA’s new production forecasts in the US might raise prices, helping farmers with rising feed costs. However, disease threats in Europe add uncertainty, potentially affecting markets and opening export opportunities for unaffected areas. New cheese plants in the US increase milk demand, which might boost prices due to a tight supply. 

In the future, dairy farmers should monitor market changes and possible disruptions. Effectively managing feed costs and finding opportunities despite supply limits could be key to success. Farmers can better handle risks and capitalize on changing market conditions for more profit by staying informed and adaptable.

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Canada Under Fire for Alleged Dairy Dumping: Global Trade Tensions Rise

Learn how Canada’s alleged dairy dumping is causing global trade tensions. Could actions from rival exporters change the dairy market?

Summary:

Canada’s dairy subsidies have upset countries like New Zealand, Australia, and the United States. These nations claim Canada is selling cheap milk and cream on the global market, making it hard for their products to compete. This situation threatens the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the United States-Mexico-Canada Agreement. The complaining countries are calling for a quick investigation, which could show Canada is breaking World Trade Organization rules. Farming groups from these countries want a united international effort to fix this problem and promote fair trade everywhere.

Key Takeaways:

  • Canada faces allegations from New Zealand, Australia, and US dairy companies for allegedly dumping low-priced milk products on global markets, threatening fair trade practices.
  • The accused countries are urging their governments to jointly address Canada’s milk pricing mechanisms, which purportedly incentivize these low-priced exports.
  • The allegations coincide with heightened global trade tensions as countries prepare for the potential imposition of trade tariffs and renegotiations, particularly with the US under President-elect Donald Trump.
  • Reports highlight significant waste in Canadian milk production, raising questions about the sustainability and fairness of Canada’s supply management system for dairy.
  • The ongoing trade rift with New Zealand is highlighted by New Zealand’s recent request for compulsory negotiations to address market access issues under a shared free-trade agreement.
  • Dairy industry leaders call for decisive and coordinated government efforts to enforce global trade rules and ensure Canada honors its trade commitments.
  • Global dairy supplies are projected to increase, adding pressure to the competitive landscape and amplifying concerns surrounding alleged dumping practices.
Canada dairy exports, international trade agreements, fair competition, anti-dumping regulations, dairy industry concerns

The international dairy trade is at a turning point, with grave accusations against Canada from major exporters like New Zealand, Australia, and the United States. The issue revolves around Canada’s allegedly cheap dairy products entering global markets; a move said to hurt fair competition and disrupt existing trade deals. Tensions are rising, and these countries are calling for quick action to protect their financial interests and uphold international trade agreements like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the United States-Mexico-Canada Agreement. This situation challenges the balance of global dairy trade, requiring immediate diplomatic efforts and policy changes.

CountryTotal Dairy Exports in 2023 (Million USD)Dairy Export Growth Rate 2022-2023 (%)Major Export Destinations
Canada5008.5United States, China, Mexico
New Zealand16,5007.3China, United States, EU
Australia3,0004.2China, Japan, Indonesia
United States6,7005.1Mexico, Canada, China

Source: Dairy Export Statistics 2023 from Global Trade Data

International Dairy Industry Stands United Against Canadian Export Practices

Canada’s pricing of dairy products has upset other countries, leading to accusations of unfair trade. New Zealand, Australia, and the United States argue that Canada’s complicated milk pricing system allows it to sell exports at low prices that harm global markets. This system is supposed to keep costs stable at home, but the extra products are sold overseas below what it costs to produce them. Competitors call this “dumping” and claim it disrupts fair competition and hurts exports from other countries trying to access fair markets. 

The Dairy Companies Association of New Zealand (DCANZ) is leading the opposition, with support from Australian and American dairy associations. DCANZ sent a strong letter to ministers, highlighting the importance of following World Trade Organization rules and scrutinizing Canada’s practices. They want audits and coordinated efforts to ensure fair pricing and open trade. Diplomatic discussions have covered these concerns and possible breaches of anti-dumping rules. 

The Australian Dairy Industry Council is also concerned about. the impact of Canadian exports on its industry. Chair Ben Bennett says all means must be used toy. In the United States, dairy groups work with those in New Zealand and Australia, hoping changes to the US-Mexico-Canada Agreement will create balanced competition across North America. While Canada aims to stabilize local costs, opponents are determined to use enforcement to restore fairness to global dairy markets.

Canada’s Stalwart Defense: Upholding Dairy Pricing Strategies Amidst International Criticism

Despite international criticism, Canada vigorously defends its dairy pricing strategies. Officials argue that their supply management system is essential for keeping the domestic market stable, supporting local dairy farmers, and ensuring fair prices for consumers. They also see this system as vital for handling changes in the global dairy market. 

Canada claims that exporting surplus milk protein is not meant to disrupt international markets but to manage domestic supply efficiently. They view this as a reasonable solution that fits within global trade rules. 

In response to the accusations, Canada emphasizes its commitment to World Trade Organization regulations and existing trade deals. They call for discussion and diplomacy to resolve these issues without worsening trade tensions. This approach shows Canada’s desire to align domestic practices with global standards while protecting its interests. Canada is ready to negotiate solutions that reassure its trading partners, maintaining its place in the worldwide dairy market.

The Global Dairy Market at a Crossroads: Potential Trade Conflicts and Economic Repercussions

The ongoing claims against Canada regarding its dairy pricing have essential effects on the global market. A significant concern is the risk of rising trade conflicts. If these issues aren’t addressed, countries might put tariffs or penalties on Canadian dairy products, possibly leading to a trade war that could affect the dairy industry and other business areas. 

This situation could cause instability in the international dairy market. If supply changes due to these conflicts, milk prices worldwide could drop, putting pressure on farmers and affecting their ability to make a profit. Consumers might face higher dairy costs and fewer options, impacting their budgets and satisfaction. 

The Intricacy of Global Dairy Trade and Pathways to Resolution

The ongoing dispute over Canadian dairy pricing highlights the complexities of global trade. To handle these issues and keep the dairy market steady, several steps are crucial: 

  • Diplomatic Talks: Effective conversations between countries are vital for resolving issues. These talks can help set fair terms and ensure stability in the dairy sector.
  • Review Trade Pacts: It’s essential to revisit agreements like the CPTPP and USMCA to ensure they are fair and up-to-date with current economic conditions.
  • WTO Role: The WTO can act as a neutral party to mediate disputes and ensure trade fairness, helping to prevent further conflicts.
  • Industry Cooperation: Greater collaboration among global dairy industries can improve growth strategies, address surplus issues, and ensure fair competition.

The Bottom Line

The controversy over Canada’s dairy pricing practices highlights tensions among major dairy exporters. Accusations from New Zealand, Australia, and the United States suggest that Canada disrupts trade agreements like the CPTPP and USMCA by selling surplus dairy cheaply, giving its exporters an unfair advantage. This ongoing issue emphasizes the importance of diplomacy and cooperation. Stakeholders encourage Canada to comply with global trade norms for fair competition. Ignoring these concerns may lead to tariffs or renegotiations of trade deals, causing broader economic impacts. As international discussions continue, potential policy changes in Canada could reshape the dairy market. Platforms like the WTO may offer ways to negotiate and promote a fair global dairy trade. Strategic policy adjustments and diplomacy are essential for a sustainable future for the worldwide dairy industry while protecting all parties’ interests.

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Algeria’s Dairy Boom: Stable Milk Powder Imports and Strategic Growth in a Key Global Market

Algeria’s dairy market is growing. What effect do steady imports of milk powder have on it? Please find out how it affects sellers worldwide and what the future holds.

Summary:

Algeria is one of the world’s biggest buyers of milk powder. It needs more than 5 billion liters of milk annually but only makes 3.7 billion liters. Algeria’s government has started programs and given money to help the country’s dairy industry grow. Even with these efforts, Algeria still needs a lot of milk powder from other countries. To meet its needs, it imported 125,216 tons last year. The United States and the European Union send most of this milk powder. To become more self-sufficient, the country is working with global suppliers to reduce its need to import goods and increase production. Algeria has more than 44 million people, and their demand for dairy products keeps rising. This means the country must balance importing dairy products and growing its industries.

Key Takeaways:

  • Algeria stands as one of the leading global importers of milk powders, reflecting its significant reliance on external sources to meet domestic demand.
  • Current figures indicate a substantial gap between Algeria’s milk production and increasing consumer demand, highlighting the necessity for sector growth.
  • Government initiatives are actively underway, including subsidies and strategic programs to expand herd size and boost productivity in the dairy sector.
  • Import trends reveal a steady demand for whole milk powder (WMP) and nonfat dry milk (NDM), underscoring Algeria’s dependence on these imports.
  • The European Union is dominant in supplying nonfat dry milk to Algeria, closely followed by the United States as a key exporter.
  • Government measures, compounded by global inflation, have reduced butter and cheese imports, impacting trade dynamics.
  • Algeria’s expanding dairy industry and growing population suggest a continued and potentially increased demand for milk powder imports, presenting opportunities and challenges for international dairy suppliers.
Algeria dairy market, milk powder imports, dairy production initiatives, whole milk powder demand, nonfat dry milk suppliers

Algeria’s dairy market holds significant sway in the global dairy trade due to its substantial milk powder imports. This dependence fuels the rapid growth of Algeria’s dairy industry and plays a critical role in the worldwide dairy trade dynamics. The country’s substantial need for milk powder significantly influences the market and shapes the strategies of international dairy suppliers.

YearTotal Milk Powder Imports (Metric Tons)Percentage Change from Previous Year
2020350,000+5%
2021365,000+4.3%
2022380,000+4.1%
2023395,000+3.9%

Opportunities for Growth: Algeria’s Dairy Demand vs. Domestic Production

There is a big difference between what Algeria can produce and what its people need in the dairy market. With more than 44 million people, there is a lot of demand for dairy products. Algeria only makes 3.7 billion liters of milk annually but needs more than 5 billion liters. Because of this gap, Algeria has to import a large amount of milk powder to meet its needs. Last year, the country brought 125,216 tons of milk powder to compensate for this shortfall. As a prominent importer, I know that these goods are necessary. Big dairy suppliers like the EU and the US are affected by Algeria’s buying habits, as changes in what Algeria buys can impact markets worldwide.

Strategic Initiatives: Fortifying Algeria’s Domestic Dairy Sector 

The Algerian government has started a plan to produce more milk to meet the rising demand in the dairy industry. This plan includes many programs and subsidies to help increase the amount and quality of milk produced in the area. It means spending money on breeding programs to improve each cow’s milk production and grow the herd with better genetics and management. Farmers also receive money to use new tools and techniques.

To keep animals healthy, the government also lowers the prices of veterinary care and feed for cattle. Subsidies help farmers buy high-quality feed and technology that will help them make more money and cut costs. By doubling its fresh milk production over the next ten years, these efforts hope to make Algeria less reliant on milk powders that are brought in from other countries. The Algerian government also works with experts from different countries to help its growth strategy with their knowledge and resources. The goal of this strategy is to make Algeria self-sufficient, which will make it a strong competitor in the regional dairy market.

Algeria’s Milk Powder Import Dependence: An Emerging Global Frontrunner

Algeria imports a lot of milk powder from other countries, showing how important it is for international suppliers to meet its dairy needs. This is clear because it brings in a lot of whole milk powder (WMP) and nonfat dry milk (NDM). Algeria recently brought in 258,374 metric tons of WMP, which is 5% more than the previous year and shows high demand. On the other hand, imports of nonfat dry milk went down by 3%, equal to 125,216 metric tons. These changes are due to changing market needs and Algeria’s trouble making enough milk independently. They must import things because their production can’t meet the rising demand. So, boosting local production and becoming self-sufficient are critical goals for Algeria’s dairy industry. At the same time, the country works with suppliers around the world to fill the milk powder gap.

Trade Titans: The European Union and the United States Competing in Algeria’s Dairy Import Arena

As Algeria’s primary source of nonfat dry milk (NDM), the European Union is an integral part of the global dairy trade. The EU ensures that Algeria always has enough NDM because they are close and have good trade deals. Algeria got much of its NDM from the EU in 2022, which shows its importance to Algeria’s dairy supply chain. The US is also involved in the market and sees Algeria as an essential place to sell its goods, though it is not the leading supplier. The US Dairy Export Council sees Algeria as an important market. The US’s strengths are shown by its exports of whole milk powder (WMP) and non-dairy milk (NDM). American dairy products are known for being cheap and having fair prices. They still have a presence in Algeria, even though they aren’t as strong there as in the EU in NDM.

Algeria’s trade with these big dairy exporters affects markets around the world. The EU’s vital role shows that trade relations are good, which is good for the economy and makes sure Algeria has a steady supply of dairy. At the same time, the US is trying to get a more significant share of Algeria’s dairy market so it can compete with the EU and offer more goods for export. These efforts by big dairy exporters to get into new markets could change trade plans and even prices and supply chains worldwide.

The occurrence of these trade fairs is of paramount importance for the economy. Competition not only leads to the production of better products and lower prices for consumers worldwide but also raises export standards, improves logistics, and enhances production quality. While there are opportunities for smaller exporters to enter growing markets like Algeria, they may face challenges due to established trade networks and issues with infrastructure and regulations that make market entry more difficult.

Recalibrating Trade Dynamics: Algeria’s Strategic Shift in Dairy Imports

Algeria’s government is working hard to increase its dairy production, so it needs to import less milk. So the country does not have to import as much butter and cheese. This drop is because of what the government did and rising prices worldwide. Algeria has cut down on importing butter and cheese by giving money to local dairy farmers to help them make more. This change complicates things for international suppliers, so they must rethink their plans because Algeria’s market is changing. Because of these changes, global suppliers must offer better prices and develop new ways to stay competitive in a world where inflation is rising. Algeria’s policies are being implemented.

Future Horizons: Navigating Algeria’s Expanding Dairy Demands Amid Population and Industrial Growth 

As Algeria’s population grows, so does its need to import more milk powder. This rise is due to more people living in the area and more industrial demand for dairy products despite efforts to increase local production. Algeria is still a significant market for dairy exporters worldwide, and they expect to keep needing imported milk powders to meet their needs. Exporters, especially those from the US and the EU, can take advantage of this situation and face problems. As Algeria’s primary Nonfat Dry Milk (NDM) source, the EU may need to improve its supply chain and build stronger trade links. This could be done by making shipping more flexible or teaming up with Algerian businesses. The United States, which has a significant role in Algeria’s Whole Milk Powder (WMP) market, must keep up with consumer tastes and regulations that affect Algeria’s import rules.

As Algeria’s dairy industry grows, competition between global suppliers will become more challenging. Exporters must watch for changes in local policies that will reduce imports and look for ways to collaborate with Algeria, such as sharing technology and knowledge. To be successful, exporters need to be flexible and creative. For example, they could offer products and marketing plans made explicitly for the Algerian market. This plan will help them maintain and grow their presence in this vital part of North Africa.

The Bottom Line

Algeria is one of the world’s biggest buyers of milk powder, making it an essential player in the dairy market. Because Algeria’s production isn’t keeping up with demand, it needs imports from other countries. The government helps the dairy industry by giving them subsidies and running programs to improve local production. However, Algeria still needs to import many things, primarily whole milk powder (WMP) and nonfat dry milk (NDM). The EU and the US are the primary sources of these goods. Recently, the government cut butter and cheese imports to keep prices down because of rising prices worldwide. This has both challenges and opportunities for traders. With a growing population and dairy industry, Algeria’s future as a market for milk powder imports looks very bright for people who know how the business works. Suppliers who want to meet Algeria’s growing needs must monitor these trends. Knowing this about the market helps suppliers plan and adjust to changes in the economy and how goods are imported.

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Global Dairy Market Update: Key Insights for Farmers – January 13, 2025

Check out the latest dairy market trends. How will global changes affect your farm’s profits? Find strategies you can use now.

Summary:

The global dairy market is going through some ups and downs, with different price changes in each region. On the EEX and SGX, trading has shown various pricing movements. In Europe, dairy product prices like cheese are mixed, while the Global Dairy Trade auction shows changing buyer interests. Milk collections in Ireland and Spain are growing, but China’s farmgate milk prices are steady, although still lower than before. In the U.S., there’s a problem with bottled milk and cheese shortages after the holidays, and the whey and milk powder markets are changing, too. This means dairy farmers must stay adaptable and make smart decisions to handle these shifting market conditions.

Key Takeaways:

  • Trading on the European Energy Exchange (EEX) showed a slightly positive trend in the butter futures market, demonstrating a minor overall price increase. In contrast, the Skim Milk Powder (SMP) market slightly declined.
  • The Singapore Exchange (SGX) market also experienced a robust trading week, particularly in Whole Milk Powder (WMP) and Skim Milk Powder (SMP) contracts, reflecting an upward trajectory in prices.
  • European quotations for dairy products exhibited varied movements, with notable increases in Skim Milk Powder and Whey against Butter and Whole Milk Powder declines.
  • European cheese indices displayed mixed trends, with distinct increases in Mild Cheddar and Mozzarella, contrasting with declines in Cheddar Curd and Young Gouda prices.
  • The Global Dairy Trade auction saw a general decline, notably in WMP and SMP prices, while AMF fell slightly, and butter prices showed resilience with a modest increase.
  • Irish milk collections in November displayed remarkable growth, highlighting significant year-over-year increases, while Spanish milk production remained steady with slight upward movement.
  • China’s dairy market is experiencing stabilization in farmgate milk prices but continues to face a long-term downward trend, marking the lowest price levels since 2013.
  • U.S. dairy markets are adjusting to post-holiday norms, with tight milk supply reflecting increasing demand, whereas cream remains in surplus.
  • Whey production in the U.S. sees a disparity between high-protein isolates and commodity powders amid changes in export dynamics.
  • U.S. milk powder markets face challenges following a drop in production and export volumes, indicating competitive pressure from international counterparts.
  • Futures in the U.S. dairy sector remain mixed, with variable trends for Class III and Class IV contracts, indicating economic potential for dairy producers amid changing commodity costs.
dairy farming challenges, dairy market trading platforms, European Energy Exchange, Singapore Exchange dairy futures, milk price trends

Over 600 million families worldwide rely on dairy farming. Still, the industry faces significant challenges, such as changing market prices and unpredictable weather. Picture farmers in New Zealand waking up to find that whole milk powder prices have shifted overnight. That’s the reality of the dairy industry. Understanding global trends is crucial for farmers as it assists them in making informed production decisions, securing favorable deals, and maintaining resilience in the face of unforeseen circumstances. Farmers can improve their production and financial planning by staying updated on market dynamics and staying competitive in the ever-changing dairy market. 

RegionProductAverage Price 
(Jan25-Aug25)
Price Change
European QuotationsButter€7,252+1.8%
European QuotationsSMP (Skim Milk Powder)€2,663-0.5%
SGX FuturesWMP (Whole Milk Powder)$3,732+1.8%
SGX FuturesAMF (Anhydrous Milk Fat)$6,731-0.6%
GDT AuctionButter$7,580+2.6%
GDT AuctionCheddar$4,728+1.0%

Dairy Futures: Navigating the European Energy Exchange & Singapore Exchange 

The European Energy Exchange (EEX) and the Singapore Exchange (SGX) are key platforms for dairy market trading, providing valuable insights into market dynamics and trends. A Glimpse into the Complexities of the Dairy Market through these exchanges can help dairy farmers and stakeholders make informed decisions. The recent trades on the European Energy Exchange (EEX) show some interesting patterns in the dairy market. Last week, 1,385 tonnes were traded, mostly in butter and skimmed milk powder (SMP) futures. Butter futures increased by 1.8%, indicating strong demand and insufficient supply. This rise could push dairy farmers to make more butter for better profits. But, SMP prices dropped slightly by 0.5%, suggesting there might be too much available or people aren’t as confident about it, which might lead farmers to adjust their plans to stay profitable. 

Changes in what’s being traded also give clues. The increase of 154 lots in EEX Butter Futures shows more trust and hope for future price hikes. Meanwhile, a slight rise of 21 lots in SMP might show cautious or gamble-like buying despite the price drop. These changes show market trends and give dairy stakeholders an idea of what to expect and prepare for. Keeping updated can help farmers stay strong and do well in the ever-changing dairy world.

Dynamic Trends in the SGX Dairy Futures Market

Last week, the Singapore Exchange (SGX) buzzed with dairy trades, exchanging 9,742 tonnes of products. This shows the market is hot, and investors are all in. Let’s dive into the action for key products: Whole Milk Powder (WMP), Skim Milk Powder (SMP), Anhydrous Milk Fat (AMF), and Butter. 

  • Whole Milk Powder (WMP) jumped 1.8% from Jan 25 to Aug 25, averaging $3,732. This jump suggests that demand is rising, driving the global market’s comeback and making buyers feel more confident. WMP is bouncing back nicely after some global trade-ups and downs.
  • Skim Milk Powder (SMP) (SMP) ticked 1.1%, reaching $2,829. This increase signals steady use and might mean more milk is being processed, mainly in Asia, which relies on powdered milk.
  • Anhydrous Milk Fat (AMF) saw a slight dip of 0.6% to $6,731. This drop might indicate slowed demand, such as because people are switching to other fats or because of changes in the dairy rules of countries that buy AMF.
  • On the other hand, Butter prices on SGX rose 2.1%, averaging $6,428. This rise points to strong buyer demand, maybe for baking and holiday needs. The future path of butter prices on SGX might affect global butter supplies, especially if more people go for high-quality dairy fats. 

Overall, the SGX futures market carefully balances demand and supply in the dairy market. The trends from the Jan 25-Aug 25 contracts give clues about global dairy market shifts, showing how people buy and trade dairy products.

European Dairy Prices: A Symphony of Shifts and Uncertain Movements

This week’s European Quotations highlight how unpredictable the dairy market can be, with prices shifting in various directions.

  • Butter struggled, dropping prices by €91 (-1.2%) to €7,356. German butter fell sharply by €265 (-3.4%) to €7,425, while Dutch butter rose by €80 (+1.1%) to €7,200. These changes suggest uncertain demand and export challenges.
  • Skimmed Milk Powder (SMP) remained steady, rising by €42 (+1.7%) to €2,565. German SMP went up by €5 (+0.2%), but French SMP jumped €120 (+4.8%), showing strong demand in France.
  • Whey presented mixed signals. In Germany, prices increased by €5 (+0.6%) to €880 while declining by €10 (-1.1 %). Meanwhile, Dutch prices rose by €20 (+2.3%) to €900, suggesting changes in whey processing.
  • Whole Milk Powder (WMP) faced a €43 (-1.0%) drop to €4,341. However, Dutch WMP increased €50 (+1.1%), contrasting with France’s decrease of €42 (-0.9%). These price moves urge European dairy farmers to stay adaptable, responding to supply issues and global trade changes. 

These shifts impact European dairy farmers’ profits and plans while influencing global trade, deals, and market predictions.

Cheese Market Variations: Navigating Through European Indices Fluctuations

The recent data on the EEX Cheese Indices shows mixed trends in the European cheese market, with some prices increasing and others decreasing. Cheddar Curd slightly fell by €5, now at €4,707, possibly due to market pressures or changing demand. In contrast, Mild Cheddar rose by €3, reaching €4,724, suggesting steady demand or higher production costs. Young Gouda saw a more significant drop of €42 to €4,153, likely from a surplus in supply or shifting consumer tastes. Meanwhile, Mozzarella increased by €101, hitting €3,930, indicating strong demand and possibly more exports or local use. 

These fluctuations impact cheese producers in Europe. Those dealing with Cheddar Curd and Young Gouda must think strategically about production and markets to stabilize income. On the other hand, producers of Mild Cheddar and Mozzarella could explore boosting production or expanding their market reach, taking advantage of the favorable pricing. 

The Global Dairy Trade Auction: Navigating Through a Sea of Market Changes

The Global Dairy Trade (GDT) auction recently decreased, influencing the global dairy scene. The GDT index dipped 1.4% to TE371, showing changes in buyers’ behavior and market situations. Whole Milk Powder (WMP) dropped by 2.1%, with prices reaching $3,804, emphasizing ongoing market shifts. Skim Milk Powder (SMP) also decreased by 2.2% to $2,682, suggesting that confidence in stock and pricing is still paramount. 

These changes might be due to varying demand, currency shifts, and global political matters affecting trade. Despite this, Butter prices climbed by 2.6%, indicating strong demand for dairy fats. The Solarec Butter C2 price reached $7,580 (€7,270 with current exchange rates), illustrating varying regional needs and costs. 

Cheddar and Mozzarella did well, with 1.0% and 3.6% increases, respectively. These cheeses are popular worldwide due to their versatility and established roles in many dishes. Thanks to firm trade deals and market tactics, the cheddar price hit $4,728. 

These auction results show the factors influencing the international dairy trade. Rising costs, changes in regional production, and shifting consumer preferences all contribute to this. Exporters and producers must stay adaptable and adjust their plans to succeed in these challenging times. The results aren’t just numbers but key signs of market trends, helping businesses find profitable paths in the ever-changing global dairy market.

Prosperity in Progress: Unraveling the Milk Collection Surge in Ireland and Steady Growth in Spain

Recent trends in milk collections in Ireland and Spain show some significant changes influencing their dairy industries and the European market overall. 

Irish Milk Collections 

Ireland’s milk collections increased dramatically in November, up 33.6% from last year, to 510,000 tonnes. This jump is surprising, as the total for 2024 was down by 1.2%. Good weather extending the grazing season and improved farming methods and cattle breeds likely helped boost production. 

This growth is vital for Ireland’s dairy sector, which depends heavily on exports. More milk production could help Ireland meet local and international customers, potentially boosting its European market position. However, a balance must be struck between increasing production and considering environmental impact

Spanish Milk Collections 

In November, milk collections in Spain increased by 0.8% to 581,000 tonnes. For 2024, collections have grown by 1.5% from last year. This small rise is mainly due to slight improvements in herd management and better dairy infrastructure. However, it’s not as significant as Ireland’s increase, indicating that different factors are involved. 

Although not as impactful as Ireland’s surge, Spain’s growth supports local supply chains and might enhance its European competitiveness. Spanish producers should monitor European trade changes that might affect costs or access. 

Changes in milk collections in Ireland and Spain indicate shifts in the European dairy market. These changes impact market balance, pricing, and trade. The industry will need careful planning to take advantage of these developments while avoiding problems.

Stabilization Amid Decline: China’s Dairy Pricing and Market Dynamics

Farmgate milk prices in China’s dairy sector have stayed at 3.11 Yuan/Kg for three weeks. However, this follows twenty-seven months of price drops, suggesting deeper market issues. One big reason is the supply-demand imbalance. Better production practices mean supply is higher than demand, pushing prices down. Also, strict rules may limit smaller dairy farms’ ability to adjust, leading to more price drops. 

This long period of low prices affects the farming sector. It means smaller profits and more challenging financial times for Chinese dairy farmers. This might lead to fewer small farms and more control by larger ones. However, it also increases import demand, making China an attractive market for global dairy suppliers. With local production struggling, cheaper international imports are more appealing, boosting China’s role in global dairy trading. 

Adapting to the Chill: US Dairy Market Transitions Post-Holiday Season

Traders are back to work, and milk bottling has been busy since Christmas. A snowstorm in the South caused people to buy lots of milk and eggs, leaving empty shelves in places like Texas and Tennessee. Now, bottlers are rushing to get stock back on the shelves. 

This rush is affecting butter and cheese production. There are plenty of cheap creams, so butter production is rising. Producers are storing butter for later use. In November, butter production was up by 4.4% from last year, showing good growth. The market is stable, and butter prices are going up slowly. 

But cheese production has its issues. After the holidays, demand changed things, and earlier fears of cheese shortages led to some price changes. Recent data shows cheese production dropped by 1.7% in November from the previous year. Cheddar cheese production also went down, causing worries about trading availability. Despite these changes, cheese exports reached record highs because of strong international demand, especially from Mexico. 

This dynamic landscape presents challenges, such as fluctuating production costs and market demands, alongside opportunities for expansion and innovation for US dairy farmers. More butter production suggests a strong demand for milk fat, which might raise milk prices. However, changes in cheese trends could keep prices steady or make them unpredictable, depending on exports and domestic production

In this quick-changing market, US dairy farmers must be innovative, weighing short-term gains against long-term stability.

Tightrope Walking in Dairy: Navigating Shifting Demands and Competitive Pressures 

Whey and milk powder production trends present challenges and opportunities for the industry. Production of whey protein isolate has hit new highs, possibly driven by more health-minded consumers. However, whey powder production slightly dropped, suggesting potential market weaknesses. Whey exports fell 11.4% from last year, possibly due to changing buyer preferences and competition as China’s buying moved towards Europe. This shows a delicate balance for producers between local demand and less international interest. 

On the other hand, milk powder production dropped 10.9% compared to last year—its lowest November since 2013. Exports fell even more by 19.7%, posing a challenge for US producers. Fewer shipments to places like Mexico and Southeast Asia highlight the competitive edge of international producers, especially with a strong dollar and stable prices elsewhere. This data shows that US producers need to rethink their export strategies to regain market share

Prices for these goods depend on production levels, global competition, and currency rates. Though whey prices have settled, the slight dip in whey powder stocks and steady milk powder prices suggest possible market saturation or competition. Dairy producers must manage changing costs and stand out to stay profitable. 

These trends call for new ideas and strategic partnerships to boost growth and tackle difficulties in these areas. As markets shift, improving production efficiency and staying adaptable are crucial for producers to succeed in this unstable market.

Navigating the Uncertain Futures: Strategic Insights for Dairy Farmers 

Futures markets are shifting, especially with Class III and Class IV contracts. Class III contracts for January to April dropped about 20 cents but are still over $20 per cwt, which means income looks good. Meanwhile, Class IV contracts hold steady or slightly higher at $21.10, indicating cautious hope. It seems like a good time to pay the bills, but farmers should stay prepared for quick changes. 

Changes in corn and soybean yields also matter to dairy farmers. Corn yield is now at 179.3 bushels per acre, and soybean yield is down to 50.7 bushels. This caused March corn futures to rise to $4.71, leading to higher feed costs than expected. Farmers must keep strategies flexible for feed costs and budgeting even if they’ve locked in some prices before the fall. 

Tackling these feed cost challenges involves a few strategies. Farmers can use feed more efficiently and check out alternative feeds to cope with rising prices. Locking in prices ahead of time for some feed can shield them from market changes. Also, diversifying nutrition plans and using advanced feed technology can help manage feed costs and keep profits steady, even when markets throw surprises their way.

The Bottom Line

The dairy market is constantly changing, so keeping up is essential. Knowing how supply, demand, and prices shift can help you do well in the business. How are these changes impacting what you do? Sharing what you know could help us better understand the dairy world. Swapping ideas with other experts might bring fresh solutions, too. 

Keeping up with market trends helps you make smarter choices and find new growth opportunities. The dairy industry constantly evolves, offering new opportunities and undiscovered paths to explore. Let’s keep learning, adapting, and seizing opportunities to succeed in the dynamic dairy world. Jump into the chat below and tell us what you’re thinking. We value your input, so don’t hold back!

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Bullvine Daily is your essential e-zine for staying ahead in the dairy industry. With over 30,000 subscribers, we bring you the week’s top news, helping you manage tasks efficiently. Stay informed about milk production, tech adoption, and more, so you can concentrate on your dairy operations. 

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USDA Cuts Corn and Soybean Yield Estimates for 2024-25: Impact on Dairy Farmers and Feed Costs

Learn how USDA’s lower corn and soybean yield forecasts for 2024-25 affect dairy farmers. Will feed costs go up? Find out the effects and insights here.

Summary:

The USDA’s recent report has thrown some curveballs at dairy farmers, reducing corn and soybean yield estimates for the 2024-25 season. Corn yields are pegged at 179.3 bushels per acre, a drop from December that puts this crop behind several previous years. Soybean estimates have fallen, too, driving a ripple through markets with rising corn and soybean prices. This change hits hard for dairy farmers who rely on these crops as feed. They’ve got to get creative—trying out different feed options, planning feeds precisely, and using futures contracts to lock in decent prices. So, how will dairy farmers stay afloat in a world where surprises seem to become the norm? Strategies like these could help them stay strong amidst the uncertainty.

Key Takeaways:

  • USDA’s revised estimates for 2024-25 reflect decreased corn and soybean yields, resulting in smaller harvests compared to prior years.
  • Lower yield forecasts reduce export and feed demand projections, impacting row crop farmers and dairy producers.
  • Despite the USDA reductions, corn yield forecasts are still the highest on record, yet smaller than 2016, 2021, and 2023.
  • Unexpectedly decreased ending stocks and the seventh consecutive monthly reduction mark a significant trend over the past two decades.
  • Dairy producers may face fluctuating feed costs, but they can mitigate the impact on their operations with strategic planning.
  • The global market dynamics, including production stability in South America, play a crucial role in shaping US export and feed strategies.
  • Strategies for dairy farmers emphasize proactive planning and adaptation to market fluctuations to ensure continued viability and success.
USDA yield projections, corn yields, soybean prices, agricultural forecasting, dairy producers

Imagine passing seemingly limitless fields of corn, their green leaves dancing in the breeze. But now, picture fewer stalks and areas of vacant land—a reality from the most recent USDA estimate. Their lowered projections for soybean and corn yields for 2024–25 go beyond mere numbers. This is a significant development for dairy producers who rely on these crops for feed. It shows the difficulties farmers experience with altering temperature and economy, impacting everything from the farm to the grocery store. Dairy producers must remain vigilant and ready for these fresh difficulties, such as increased feed costs and potential changes in the nutritional value of their feed. This underscores the importance of market awareness, keeping dairy producers prepared and proactive in changing conditions.

YearCorn Yield (bu/acre)Soybean Yield (bu/acre)Corn Production (billion bu)Soybean Production (billion bu)Ending Corn Stocks (billion bu)Ending Soybean Stocks (million bu)
2023-24183.851.715.14.51.738470
2024-25 (Dec)183.151.015.04.4951.54470
2024-25 (Jan)179.350.714.74.41.54380

Agricultural Forecasts: Navigating Waves of Change with USDA’s Insight 

The United States Department of Agriculture (USDA) plays a pivotal role in agricultural forecasting, providing indispensable statistics and analysis for farmers and global players. Through studies such as the World Agricultural Supply and Demand Estimates (WASDE), the USDA offers crucial information on the expected output, consumption, and trade of key crops. By reducing uncertainty around supply issues and changes in commodity prices, these projections help plan and stabilize markets, providing a reliable guide for agricultural decisions. This insight empowers farmers and stakeholders to make informed decisions in a rapidly changing market.

Crucially essential for US agriculture, corn and soybeans support many other sectors. Corn is not only food; it also finds application in industrial goods, ethanol fuel, and animal feed. As a top corn producer and exporter, the US influences world markets and supply systems. Likewise, soybeans are vital for the economy; most are processed into oil for humans and meals for animals. The US, a leading soybean producer and exporter, uses its contributions to support global food security and economic stability.

These crops are vital for for-profit and farm sustainability in the US. Several states rely on soybean and corn output for their economies. Strong international export networks help US agriculture remain competitive worldwide, supporting economies and satisfying industrial needs. Thus, changes in USDA projections can affect US farmers and global partners.

Shifting Grounds: USDA Yield Reductions Reshape Crop Production Expectations

American agriculture is changing, as the USDA’s revised yield projections for the crop year 2024–25 show. Corn yields are now expected at 179.3 bushels per acre, a 3.8-bushel drop since December. Though this is among the highest yields on record, this decline places the 2024 crop behind years like 2016, 2021, and 2023. This decline results from less actual land used for corn, which influences total production.

The tale of soybeans is similar. The yield is now expected at 50.7 bushels per acre, down 1 bushel; the USDA cut production estimates by 95 million bushels to 4.4 billion. These developments will influence supply levels since they differ from what was anticipated. These revised projections compete fiercely with last year’s high yields.

These figures highlight a problematic scenario for American farmers. Although technology can achieve high yields, balancing actual output with market demand is challenging. Compared to past years, the USDA’s new projections clearly show a trend of changing expectations, even if 2024’s numbers are robust. This emphasizes crucial issues related to crop pricing and planning.

Market Ripples: USDA’s Revised Estimates Shake Corn and Soybean Prospects 

Following the USDA’s revised projections, the markets for soybeans and corn responded with a swift and distinct shift. The reduced yield forecasts caused corn futures to soar, shifting the market’s focus from surplus supply to tighter availability. The significant jump in corn prices per bushel, from $3.90 to $4.70, indicates a substantial change in perspective. This affects US farmers and has implications for global markets, potentially influencing trade agreements and prices worldwide.

Futures in soybeans followed a similar path. Rising prices point to limited global supply, as forecasts for important South American producers stayed the same and reflected lower production estimates. These movements in future markets highlight the speed with which fresh information influences investor attitudes.

For row crop growers, this offers possibilities as well as problems. Higher corn futures allow farmers to guarantee better selling prices, increasing income even with yield issues. However, given more market volatility, thoughtful financial planning becomes even more critical. Constant production costs mean that unanticipated input price increases could offset sales gains. To negotiate these changes, farmers must strategically consider their crop sales timing, input buying, and use of risk management tools.

The Delicate Dance of Yield Fluctuations: Navigating Dairy Farm Challenges Amid Corn and Soybean Swings 

Dairy farming is significantly impacted by corn and soybean yields, mainly in terms of feed costs. When the USDA projects declining yields, it’s about numbers for dairy producers and intelligent feed management. A dairy cow consumes roughly 60% of its diet from corn, so more expensive corn can strain resources. To cut the additional expenses, some farmers may have purchased corn silage last fall when prices were lower. The tale for soybeans is different. Although soybean output is declining, soybean meal is expected to be highly produced, so maintaining the stability of protein feed costs. This allows farmers to make adjustments free from a significant financial impact.

Dairy farmers are finding creative ways to handle these changes in yields, like: 

  • Trying out different feed sources to save money on grain costs.
  • Using detailed feed plans to get the most nutrition and reduce waste.
  • Using futures contracts to secure reasonable prices for key feed ingredients.

Despite the challenges posed by the new USDA projections, there are opportunities for dairy producers to innovate and grow. For instance, farmers can increase the protein in feed by using plenty of soybean meal to raise milk output and quality. Furthermore, the change in grain markets could result in farmers cooperating to reduce expenses. Flexibility is essential in dairy production. Though the new USDA projections cause concerns, they also provide opportunities for innovative feed and financial plans. Although challenging, this situation allows dairy producers to grow more robust in their companies and innovate, fostering a sense of hope and optimism.

Decoding Feed Costs: Strategic Insights for Dairy Producers 

Dairy operations depend critically on controlling feed costs. About 60% of a dairy cow’s diet comes from corn silage, mainly grown in early fall. This timing helps producers lock in lower prices, giving them a cushion against later price hikes. Protein meals like soybean meal are also key, and their prices fluctuate less than soybean futures. Soybean meal prices are low right now, which presents some savings.

The timing of feed purchases is quite essential. Last fall, when prices were better, producers who locked costs protected themselves from current price swings. Their ability to manage growing market prices without significant financial impact comes from this foresight. Conversely, those who wait could have more expenses. So, having a proactive buying strategy isn’t guesswork—it’s vital for wise money management on a dairy farm. Purchasing feed at reasonable rates helps to reduce financial burden and free producers to concentrate on other crucial farm operations.

Exploring the Global Arena: Impact of South American Production on US and Global Exports

Examining global market trends helps us understand how the steady production estimates for Brazil and Argentina might affect US exports and world trade. These South American nations are key participants in the worldwide grain and oilseed markets. When changed, they influence the supply chain. The USDA’s analysis indicates a consistent flow of exports since production estimates for Brazil and Argentina show no change. For the United States, this translates into more intense worldwide rivalry. Given intense production levels, US exports could work harder to remain competitive.

South American production stability also affects world inventories. As Brazil and Argentina contribute to the world supply, inventory remains plentiful. This suggests a less volatile market with stable or reduced feed costs for dairy producers and farmers, particularly soybean meals, which are vital for feed mixes. These nations’ consistent production forecasts help offset climate effects elsewhere, ensuring enough grain supplies and benefiting world prices and domestic feed costs.

A two-pronged approach might be sensible for American farmers: using their strengths while looking at abroad prospects. Knowing these trends enables dairy producers and farmers to keep ahead in the fast-changing environment and match worldwide patterns.

Empowering Dairy Farmers: Proactive Strategies for Thriving Amid Market Fluctuations

  • Forward Contracting Feed Costs: Early lock-in feed prices. Forward contracting can offer a safety net against unanticipated price increases, guaranteeing consistent feed costs in the budget despite market changes.
  • Utilize Homegrown Feed: Using native forage and silage to guarantee feed security and help lower reliance on changing market prices. Consider rotational grazing or diversifying crop rotation to get the best yield.
  • Monitor Feed Quality and Efficiency: Review the nutritional quality of your feed often. Try to increase feed efficiency to reduce total consumption without sacrificing milk output. Good feeding improves herd performance and helps you save expenses.
  • Leverage Technology for Precision Feeding: Contemporary tools like precision feeding systems will help maximize feed delivery and diet formulation, reducing waste and fine-tuning diets to suit nutritional requirements.
  • Risk Management Strategies: Consider futures contracts or crop insurance to reduce price volatility. These financial products help protect the operation from changes in the adverse market.
  • Develop Strong Supplier Relationships: Establishing strong ties with feed vendors usually leads to better terms and early access to feeding solutions, reducing possible supply chain interruptions.
  • Review and Adjust Production Goals: Production targets are often evaluated in light of the market’s state. Crucially, flexibility in changing herd size, milk production targets, and feed allocation based on financial situation can help.
  • Promote Sustainable Practices: Sustainable and conservation practices can lead to long-term cost savings, improved resource use, and increased farm resilience against climatic challenges.

The Bottom Line

As we dig into the USDA’s latest report, it’s clear that the corn and soybean yield cuts are shaking up farming. Lower yields mean tighter supplies and price changes, hitting row crop farmers and affecting feed costs for dairy producers. These shifts are challenging but also bring chances to adapt and strategize. Now more than ever, dairy farmers must closely watch these market changes. Knowing what’s happening can mean the difference between just getting by and doing well. Managing feed costs will be key to running things smoothly. We want to hear from you, our farming community. How are these yield cuts affecting your daily work? What are you doing to handle any challenges? Your stories can help others understand and deal with these changes.

Learn more:

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How U.S. Cheese Exports Are Battling European Trade Barriers and Winning

Learn how U.S. cheese exporters are dealing with EU trade obstacles. Will the SAVE Act and CCFN’s work protect market access for American dairy?

Summary:

As global demand for cheese grows, U.S. dairy producers face challenges from the European Union’s strict rules on using common food names. The EU’s protections for cheese names like Parmesan, feta, and Asiago can block American cheesemakers from selling their products under these names internationally. The Consortium for Common Food Names (CCFN) is working to protect U.S. interests by opposing unfair trademark applications. At the same time, the Safeguarding American Value-Added Exports (SAVE) Act aims to safeguard these common names in trade talks. U.S. producers must navigate these hurdles to remain competitive, with the global cheese market projected to reach $225.42 billion by 2030, driven by consumer preference for protein and ready-to-eat foods.

Key Takeaways:

  • The global cheese market is projected to grow significantly by 2030, driven by a rise in consumer interest in protein-rich and convenience foods.
  • U.S. dairy exporters face political barriers primarily due to the European Union’s restrictive policies on common food names.
  • The Consortium for Common Food Names (CCFN) actively opposes bad-faith trademark applications and advocates for preserving common names.
  • The Safeguarding American Value-Added Exports (SAVE) Act has been introduced to protect common food names in global trade negotiations.
  • Bipartisan support exists for legislative efforts to prioritize the protection of familiar names in the international market.
  • Legal victories, like the ruling on “Parmesan” use in Singapore, provide hope for continued market access for U.S. producers.
  • Resolving trade disputes is crucial for U.S. dairy exporters to remain competitive and capitalize on global market opportunities.
cheese market growth, American cheesemakers challenges, EU geographical indications, dairy export restrictions, Consortium for Common Food Names

Imagine spending decades getting better at making cheese in Wisconsin, only to find out that you can’t sell your famous Parmesan in other countries under its name. That’s what happened to Pete. The rules of the European Union made it impossible for him to sell his award-winning cheese. As a result of EU geographical indication (GI) rules, Pete couldn’t call his cheese “Parmesan” in places that follow EU rules. Pete was struggling with his life’s work, not just his business. “Getting my cheese recognized internationally,” he says, “became a fight against bureaucratic barriers.” Pete’s story shows a bigger problem. In 2030, the world’s cheese market could be worth $225.42 billion, thanks to people’s need for protein and Western diets. However, because the EU owns cheese brands like Parmesan, feta, and Asiago, U.S. cheesemakers might be unable to sell cheeses like Parmesan feta and Asiago. Let’s discuss how this problem impacts American dairy farmers and what’s being done to fix it.

Cheese Surge: Navigating Opportunities in a Growing Global Market

There are many chances for exporters to make money in the vast cheese market worldwide. With a steady growth rate of 4.28% from 2025 to 2030, it should reach $225.42 billion by 2030. The rise is changing what people around the world eat and like. A big part of this growth is that more people want protein-rich foods. Cheese is rich in protein and is favored by health-conscious individuals seeking nutritious food. There is a significant focus on consuming protein in wealthy and developing nations. Another reason is that people in developing areas love Western food. Western foods, like cheese, are becoming more popular as these places become more modern. The increase in urbanization, higher incomes, and busier lifestyles have contributed to this shift, making cheese more attractive and accessible. Also, there is more demand for ready-to-eat and convenience foods, and cheese is often the star. The growing global cheese market shows that peoples’ tastes are changing and that cheese is being used in more foods worldwide. This growth is an excellent sign for exporters ready to take advantage of the changing world.

Challenges on the Cheese Front: EU Regulations Tie Up U.S. Dairy Exporters

Most political problems that U.S. dairy exporters face stem from the EU’s strict rules on common food names and Geographical Indications (GI). These rules make it challenging for U.S. cheese makers to expand their businesses internationally. The EU uses GI rules to protect food names from specific areas, like Parmesan or feta. This helps protect local customs but can make it harder for businesses to compete. Regardless of the cheese’s origin, names like Parmesan and Asiago have been universally used to label it, even within the U.S.

The EU’s restriction on using these names can lead to U.S. exporters losing significant markets where their cheese names can no longer be used. This potential loss can profoundly affect the brand recognition and consumer loyalty these exporters have built over time.

The EU also uses free trade agreements to make these GI rules even stricter, complicating things for U.S. businesses. When a country agrees to follow EU rules, U.S. cheeses may not be as well-known in that market. This could make it harder for people to choose between U.S. cheeses and hurt U.S. exports.

These aren’t just paperwork problems for American dairy farmers but real threats. Losing access to markets can hurt their bottom line, making it harder for them to make a living and reducing the number of markets where U.S. dairy products can be sold. Addressing these problems is essential for U.S. producers to stay competitive in the global market. Without solutions in international talks, it will be hard for U.S. dairy exporters to keep their place in the world’s growing cheese market.

CCFN: A Beacon of Hope for Fair Access in the Cheese Name GameThe Consortium for Common Food Names (CCFN) is crucial in supporting U.S. dairy exporters grappling with global challenges. CCFN is at the forefront of combating unfair trademark claims worldwide, ensuring that common food names remain accessible to all. It also champions the rights of American producers in international markets, providing them with a strong voice in the global arena.

In addition, CCFN works hard to ensure that names like Asiago, Parmesan, and feta are free to use. These names are part of our shared food history and don’t belong to any one country. CCFN raises international governments’ and groups’ awareness of these problems and teaches them why open access is so important.

CCFN plans to work with U.S. government agencies like the U.S. Trade Representative (USTR) and the U.S. Department of Agriculture (USDA). They want strong protections for familiar names in trade agreements. To do this, they use various tools to keep American companies competitive on the world market, especially when EU rules are in place.

Legislating Cheese Freedom: The SAVE Act’s Crucial Role in U.S. Dairy Export ProtectionThe Safeguarding American Value-Added Exports (SAVE) Act was established by U.S. lawmakers in reaction to the European Union’s stringent regulations on generic food names. This law protects U.S. dairy exports by ensuring American cheesemakers can still sell traditional cheeses like Parmesan and feta in international markets. The SAVE Act tells the USDA and the U.S. Trade Representative to fight against the EU’s aggressive trade moves by protecting these names in trade talks. Republicans and Democrats in Congress back the Act because they know it is essential to protect American economic interests and keep U.S. dairy producers competitive.

Legal Wins Provide Hope and Opportunity for U.S. Cheese Exporters

Recent legal successes have provided optimism for U.S. exporters in the competitive cheese industry. These wins not only underscore the relentless efforts of the American dairy industry to secure fair market access but also serve as a beacon of hope for other markets grappling with the misuse of geographical indications (GI). These victories serve as a hopeful blueprint for the future.

The U.S. Circuit Court of Appeals said “Gruyere” is a general word. Groups in Europe had long fought to protect the name of a cheese made only in the Gruyere region of Switzerland and France. This decision makes it clear that producers from anywhere in the world should be able to use terms that become generic over time.

For U.S. cheese exporters, these wins are significant. They help keep markets open where they are now and give businesses a chance to grow into new ones without having to worry about unfair GI claims. The legal victories are suitable for the U.S. dairy industry because they let cheesemakers show the world the tradition and quality of American cheese.

These results show the importance of being alert and speaking out in trade. Each win makes it easier for U.S. cheese exporters to grow, ensuring that American-made cheese stays a mainstay worldwide. Thanks to groups like CCFN, U.S. cheesemakers can look forward to a bright future where heritage and new ideas can thrive in a world that respects common food names.

Strategizing Success: Navigating Trade Challenges for U.S. Cheese Exporters

Settlement of trade disputes is crucial for the future of U.S. cheese exports. The worldwide cheese market is expanding rapidly, and American dairy farmers must address these problems to exploit new international opportunities. Strict geographical indication (GI) and naming regulations present substantial obstacles for U.S. cheesemakers. However, overcoming these problems isn’t just the law; it’s also essential for U.S. cheesemakers to stay competitive in the global market.

Remaining competitive demands more than a reactive approach; it necessitates robust laws, proactive strategies, and continuous advocacy. The Safeguarding American Value-Added Exports (SAVE) Act is a step in the right direction. By protecting common names, the U.S. takes a more assertive stance in global negotiations and supports fair trade. But that’s not the end of the work. Groups like the Consortium for Common Food Names (CCFN) must keep fighting against unfair trade policies that could hurt U.S. producers.

Legal actions, diplomatic talks, and strategic partnerships with allies worldwide are needed to move forward. U.S. dairy exporters will be better able to take advantage of the growing demand for cheese if they focus on ending current disputes and stopping new ones from happening. Achieving success requires strategic planning and diplomatic efforts. Still, the future looks bright for American dairy products worldwide with the right help and hard work. Winning in these areas will protect current markets and open up new ones, which will help U.S. cheesemaking grow around the world.

The Bottom Line

Let’s work together to protect our American cheeses as the market for cheese worldwide grows. For our dairy farmers and cheesemakers, the fight against EU rules isn’t just about names. We’re all in this together, whether you like farming or cheese. Help with things like the SAVE Act and the CCFN. Your opinion is vital. We value your input and invite you to join the discussion! Please participate in the conversation on community forums, social media, or with groups fighting for our cause. By working together, we’ll keep our beloved cheeses’ taste, history, and quality alive.

Learn more:

Join the Revolution!

Bullvine Daily is your essential e-zine for staying ahead in the dairy industry. With over 30,000 subscribers, we bring you the week’s top news, helping you manage tasks efficiently. Stay informed about milk production, tech adoption, and more, so you can concentrate on your dairy operations. 

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US Dairy Market Insights: Weaker Cheese Production, Stronger Butter Output, and Price Trends

Check out the US dairy market: less cheese, more butter, and price changes. What does this mean for farm profits? Learn more here.

Summary:

The U.S. dairy industry is seeing mixed results, with cheese production down 1.7% in November and butter production up 4.4%. While European dairy prices are rising, American cheese and butter prices have stayed stable due to balanced domestic supply and demand. California, a major dairy state, faces slow milk production recovery after a bird flu outbreak, impacting overall U.S. output. Domestic demand and exports are weak, making profitability challenging. Yet, demand is high, with 21% more butter consumed, which could raise prices. Dairy farms need innovative strategies to adapt, like focusing on the strong butter market and dealing with weaker cheese production. The U.S. market stability contrasts with European trends due to different factors like supply, demand, and currency changes. California’s bird flu and weather issues have also slowed milk production, affecting cheese and butter. Farmers should innovate, diversify crops, and explore new markets to stay profitable. While butter production will likely grow, cheese may struggle with production challenges. Adapting to market changes, staying informed, and embracing new opportunities are crucial for success in the dairy industry.

Key Takeaways:

  • U.S. cheese production in November saw a decline, contrasting with an unexpected surge in butter output.
  • Despite producing more butter, domestic consumption was extreme, showing a 21% growth year-over-year compared to cheese consumption, which weakened.
  • European dairy markets exhibit upward price trends, while U.S. prices remain stable despite weak domestic demand.
  • The recovery of milk production in California has been slower than anticipated post-bird flu, affecting the overall U.S. dairy supply.
  • An ongoing bird flu outbreak challenges California dairy farms, influencing milk production levels.
  • The U.S. is experiencing organic milk production trends, suggesting consumer preference shifts.
  • The market outlook remains complex, and monitoring production, pricing, and demands are necessary to maintain profitability closely.
butter production increase, cheese production decrease, dairy farm profitability, US dairy supply chain, dairy market trends

It’s hard to believe that butter production increased in the U.S. while cheese production decreased. It’s happening just like that as of January 2025. Cheese production in the U.S. decreased by 1.7% compared to the previous month’s forecast, while butter production saw a significant increase of 4.4%. The 2.0% drop in cheese sales and stock changes could lead to financial challenges for producers, affecting their profitability. On the other hand, the 21% rise in butter disappearance in the United States shows that consumers want it a lot, which could help farms make more money.

Production TypeNovember Production (2024)Forecast Change (%)Domestic Disappearance Change (%)
Cheese1.152 billion lbs-1.7%-2.0%
ButterIncreased+4.4%+21.0%

U.S. Dairy Production: A Story of Contrasts with Declining Cheese and Rising Butter Output 

The most recent U.S. dairy data shows that butter production is increasing while cheese production is slowing down. While cheese production decreased by 1.7% in November, butter production increased by 4.4%, influencing the dynamics of the dairy industry. This mix of production affects the profits of dairy farms.

If there is less cheese, prices might stay the same or increase. However, the 2.0% drop in domestic consumption makes it hard for prices to increase, which is terrible for dairy producers.

On the other hand, more butter is being made. With 21% more butter being eaten in the United States, demand is high and could cause prices to go up. But it’s still hard to balance this with weak exports. Farmers who raise dairy have to deal with a tricky market where local demand is high but international interest is low.

Dairy farms need to make smart moves to make money. Cheese producers must get used to insufficient cheese and make the most of the strong butter market. They must pay attention to market signals and change their plans to make the most money in this ever-changing environment.

The Dairy Pricing Duality: European Surge versus American Stability

The world of dairy pricing is like a mix of lively European trends and steady American vibes. European Union (EU) dairy prices are rising, sparking market attention. 

Here’s why those prices are climbing in the EU: 

  • Limited Supply: Weather issues and new rules have made supply tighter.
  • Higher Costs: European farmers face increased bills for feed and fuel.
  • Steady Demand: People in the EU are buying more dairy, partly due to diet trends.
  • Currency Changes: A strong Euro affects exports, changing trade patterns.

Conversely, in the US, cheese and butter prices are staying steady. Here’s what’s keeping them stable: 

  • Production Balance: Less cheese but more butter production keeps things balanced.
  • Market Balance at Home: Low demand for cheese matches the drop in production, preventing big price swings.
  • Exports: While exports aren’t booming, they’re steady enough to keep prices calm.
  • Traders’ Confidence: Traders believe in stable futures, which lowers speculation.

These elements highlight a split dairy world, with the EU on the move and the US holding steady. Grasping these reasons helps dairy farmers make sense of the market and plan wisely in today’s environment.

California: The Powerhouse State Grappling with Dairy Production Delays

California, which makes a lot of milk in the U.S., has problems. The return of milk output is taking longer than expected. What’s the reason for the delay, then? First, the ongoing bird flu outbreak has significantly impacted the state dairy farms. The flu has made finding healthy animals and production facilities harder, slowing recovery. Stuck with a heavy bag on your foot makes it hard to move forward.

Another problem is weather-related problems. Unpredictable weather patterns, such as droughts and sudden temperature changes, make growing crops more difficult. Nature knows how to surprise us, doesn’t she?

What’s the bigger picture here? The U.S. dairy supply chain is under considerable stress because of problems in California’s production. As the top state, California’s slow recovery has reduced the milk supply, affecting cheese and butter production.

We need to monitor California’s recovery timeline. This timeline is crucial for stabilizing state production and the U.S. dairy market. Let’s hope things improve soon.

U.S. Dairy Demand Dynamics: Navigating Shifts Amidst a Changing Market

Demand problems can’t be ignored in the U.S. dairy industry, which is constantly changing. The demand for dairy products in the United States is going down, and exports are also going down. But why is this happening? What does this mean for the market as a whole?

There are several reasons why demand at home is low. More people are choosing foods that don’t contain dairy, and plant-based milk products are becoming more popular for ethical, health, and environmental reasons. This means that traditional dairy products are losing market share. Also, people who care more about their health are eating less dairy.

Issues around the world make exporting difficult. Trade disputes and geopolitical tensions still affect U.S. dairy exports, which makes business unpredictable. Because of new rules and taxes, American dairy products are not as competitive as those from other countries. Changes in currencies make things worse by hurting exports to important markets.

The dairy market is being affected by these trends in a big way. If dairy farmers don’t change their production to match changes in consumer habits, they may lose money as demand changes. Farmers must know these problems and change how they do things to stay profitable.

Farmers should develop new ideas and cultivate different types of crops to address these problems. They could also develop products that add value or enter new markets locally and internationally. For example, changing the names of dairy products and working with stores and marketing groups could help them sell more.

As the market changes, those with a stake in it must balance tradition and change to stay competitive and meet customer needs. Although challenging, addressing these problems could lead to new growth opportunities.

Strategies for the Future: Navigating Health Crises and Organic Trends in Dairy

The dairy industry is experiencing significant changes that could affect its future. For example, fifteen more states have adopted the USDA’s National Milk Testing Strategy for H5N1. This is being done to protect the country’s dairy supply from bird flu, which still affects California dairy farms. The ongoing outbreak shows the importance of strong security and surveillance measures.

At the same time, more organic milk is being made in the U.S. The market is changing because more people are choosing organic food. After all, it is better for their health and the environment. Because organic milk is gaining a larger market share, production methods may need to change.

Overall, these changes show how complicated and constantly changing the dairy business is. It must deal with health risks and changing consumer tastes, which requires dairy producers to be flexible and develop innovative plans.

Riding the Dairy Rollercoaster: Navigating Complexities and Opportunities Ahead 

Due to high demand, butter production looks strong in the coming months. In November, production rose by a massive 21%. Cheese production, on the other hand, may have problems now that it has dropped 1.7%. Prices are also getting a lot of attention. Dairy prices are going up in the EU, similar to what happened at the Global Dairy Trade events, though the changes weren’t as significant as people thought they would be. In the US, stable prices for cheese and butter may be good news, but prices for nonfat dry milk (NFDM) and dry whey are tricky. Farmers will see both problems and ways to make money. Many people want to buy butter, which is good, but problems with making cheese and lower milk yields, especially in California after the bird flu, could make things less happy. Producers have to balance what the market wants with what they can make.

Here’s what to watch moving forward: 

  • Global Economy: Economic changes worldwide can affect demand and prices. It is essential to monitor politics and trade policies.
  • California’s Recovery: How quickly California’s dairy industry recovers will impact the nation’s milk supply.
  • Consumer Habits: More interest in organic products and changing diets can shift how much dairy people consume.
  • Health Issues: Diseases like H5N1 could unexpectedly affect production.

To address these problems, producers must adapt their businesses to changing market conditions. The dairy business is at a crossroads, so that the next few months will be interesting.

The Bottom Line

The dairy world is full of changes, bringing challenges and chances for those in the game. We’ve looked at the highs and lows in cheese and butter production and the unique issues facing places like California. It’s clear that being flexible and thinking ahead are key. How will these trends shape your business moves soon? Dive into these insights, think about their meaning, and explore innovative solutions for your needs. Stay informed, strategize proactively, and embrace the dynamic opportunities in the dairy market. We’d love to hear from you and work together as we untangle this complex world.

Learn more:

Check out the US dairy market: less cheese, more butter, and price changes. What does this mean for farm profits? Learn more here.

Summary:

The U.S. dairy industry is seeing mixed results, with cheese production down 1.7% in November and butter production up 4.4%. While European dairy prices are rising, American cheese and butter prices have stayed stable due to balanced domestic supply and demand. California, a major dairy state, faces slow milk production recovery after a bird flu outbreak, impacting overall U.S. output. Domestic demand and exports are weak, making profitability challenging. Yet, demand is high, with 21% more butter consumed, which could raise prices. Dairy farms need innovative strategies to adapt, like focusing on the strong butter market and dealing with weaker cheese production. The U.S. market stability contrasts with European trends due to different factors like supply, demand, and currency changes. California’s bird flu and weather issues have also slowed milk production, affecting cheese and butter. Farmers should innovate, diversify crops, and explore new markets to stay profitable. While butter production will likely grow, cheese may struggle with production challenges. Adapting to market changes, staying informed, and embracing new opportunities are crucial for success in the dairy industry.

Key Takeaways:

  • U.S. cheese production in November saw a decline, contrasting with an unexpected surge in butter output.
  • Despite producing more butter, domestic consumption was extreme, showing a 21% growth year-over-year compared to cheese consumption, which weakened.
  • European dairy markets exhibit upward price trends, while U.S. prices remain stable despite weak domestic demand.
  • The recovery of milk production in California has been slower than anticipated post-bird flu, affecting the overall U.S. dairy supply.
  • An ongoing bird flu outbreak challenges California dairy farms, influencing milk production levels.
  • The U.S. is experiencing organic milk production trends, suggesting consumer preference shifts.
  • The market outlook remains complex, and monitoring production, pricing, and demands are necessary to maintain profitability closely.

It’s hard to believe that butter production increased in the U.S. while cheese production decreased. It’s happening just like that as of January 2025. Cheese production in the U.S. decreased by 1.7% compared to the previous month’s forecast, while butter production saw a significant increase of 4.4%. The 2.0% drop in cheese sales and stock changes could lead to financial challenges for producers, affecting their profitability. On the other hand, the 21% rise in butter disappearance in the United States shows that consumers want it a lot, which could help farms make more money.

Production TypeNovember Production (2024)Forecast Change (%)Domestic Disappearance Change (%)
Cheese1.152 billion lbs-1.7%-2.0%
ButterIncreased+4.4%+21.0%

U.S. Dairy Production: A Story of Contrasts with Declining Cheese and Rising Butter Output 

The most recent U.S. dairy data shows that butter production is increasing while cheese production is slowing down. While cheese production decreased by 1.7% in November, butter production increased by 4.4%, influencing the dynamics of the dairy industry. This mix of production affects the profits of dairy farms.

If there is less cheese, prices might stay the same or increase. However, the 2.0% drop in domestic consumption makes it hard for prices to increase, which is terrible for dairy producers.

On the other hand, more butter is being made. With 21% more butter being eaten in the United States, demand is high and could cause prices to go up. But it’s still hard to balance this with weak exports. Farmers who raise dairy have to deal with a tricky market where local demand is high but international interest is low.

Dairy farms need to make smart moves to make money. Cheese producers must get used to insufficient cheese and make the most of the strong butter market. They must pay attention to market signals and change their plans to make the most money in this ever-changing environment.

The Dairy Pricing Duality: European Surge versus American Stability

The world of dairy pricing is like a mix of lively European trends and steady American vibes. European Union (EU) dairy prices are rising, sparking market attention. 

Here’s why those prices are climbing in the EU: 

  • Limited Supply: Weather issues and new rules have made supply tighter.
  • Higher Costs: European farmers face increased bills for feed and fuel.
  • Steady Demand: People in the EU are buying more dairy, partly due to diet trends.
  • Currency Changes: A strong Euro affects exports, changing trade patterns.

Conversely, in the US, cheese and butter prices are staying steady. Here’s what’s keeping them stable: 

  • Production Balance: Less cheese but more butter production keeps things balanced.
  • Market Balance at Home: Low demand for cheese matches the drop in production, preventing big price swings.
  • Exports: While exports aren’t booming, they’re steady enough to keep prices calm.
  • Traders’ Confidence: Traders believe in stable futures, which lowers speculation.

These elements highlight a split dairy world, with the EU on the move and the US holding steady. Grasping these reasons helps dairy farmers make sense of the market and plan wisely in today’s environment.

California: The Powerhouse State Grappling with Dairy Production Delays

California, which makes a lot of milk in the U.S., has problems. The return of milk output is taking longer than expected. What’s the reason for the delay, then? First, the ongoing bird flu outbreak has significantly impacted the state dairy farms. The flu has made finding healthy animals and production facilities harder, slowing recovery. Stuck with a heavy bag on your foot makes it hard to move forward.

Another problem is weather-related problems. Unpredictable weather patterns, such as droughts and sudden temperature changes, make growing crops more difficult. Nature knows how to surprise us, doesn’t she?

What’s the bigger picture here? The U.S. dairy supply chain is under considerable stress because of problems in California’s production. As the top state, California’s slow recovery has reduced the milk supply, affecting cheese and butter production.

We need to monitor California’s recovery timeline. This timeline is crucial for stabilizing state production and the U.S. dairy market. Let’s hope things improve soon.

U.S. Dairy Demand Dynamics: Navigating Shifts Amidst a Changing Market

Demand problems can’t be ignored in the U.S. dairy industry, which is constantly changing. The demand for dairy products in the United States is going down, and exports are also going down. But why is this happening? What does this mean for the market as a whole?

There are several reasons why demand at home is low. More people are choosing foods that don’t contain dairy, and plant-based milk products are becoming more popular for ethical, health, and environmental reasons. This means that traditional dairy products are losing market share. Also, people who care more about their health are eating less dairy.

Issues around the world make exporting difficult. Trade disputes and geopolitical tensions still affect U.S. dairy exports, which makes business unpredictable. Because of new rules and taxes, American dairy products are not as competitive as those from other countries. Changes in currencies make things worse by hurting exports to important markets.

The dairy market is being affected by these trends in a big way. If dairy farmers don’t change their production to match changes in consumer habits, they may lose money as demand changes. Farmers must know these problems and change how they do things to stay profitable.

Farmers should develop new ideas and cultivate different types of crops to address these problems. They could also develop products that add value or enter new markets locally and internationally. For example, changing the names of dairy products and working with stores and marketing groups could help them sell more.

As the market changes, those with a stake in it must balance tradition and change to stay competitive and meet customer needs. Although challenging, addressing these problems could lead to new growth opportunities.

Strategies for the Future: Navigating Health Crises and Organic Trends in Dairy

The dairy industry is experiencing significant changes that could affect its future. For example, fifteen more states have adopted the USDA’s National Milk Testing Strategy for H5N1. This is being done to protect the country’s dairy supply from bird flu, which still affects California dairy farms. The ongoing outbreak shows the importance of strong security and surveillance measures.

At the same time, more organic milk is being made in the U.S. The market is changing because more people are choosing organic food. After all, it is better for their health and the environment. Because organic milk is gaining a larger market share, production methods may need to change.

Overall, these changes show how complicated and constantly changing the dairy business is. It must deal with health risks and changing consumer tastes, which requires dairy producers to be flexible and develop innovative plans.

Riding the Dairy Rollercoaster: Navigating Complexities and Opportunities Ahead 

Due to high demand, butter production looks strong in the coming months. In November, production rose by a massive 21%. Cheese production, on the other hand, may have problems now that it has dropped 1.7%. Prices are also getting a lot of attention. Dairy prices are going up in the EU, similar to what happened at the Global Dairy Trade events, though the changes weren’t as significant as people thought they would be. In the US, stable prices for cheese and butter may be good news, but prices for nonfat dry milk (NFDM) and dry whey are tricky. Farmers will see both problems and ways to make money. Many people want to buy butter, which is good, but problems with making cheese and lower milk yields, especially in California after the bird flu, could make things less happy. Producers have to balance what the market wants with what they can make.

Here’s what to watch moving forward: 

  • Global Economy: Economic changes worldwide can affect demand and prices. It is essential to monitor politics and trade policies.
  • California’s Recovery: How quickly California’s dairy industry recovers will impact the nation’s milk supply.
  • Consumer Habits: More interest in organic products and changing diets can shift how much dairy people consume.
  • Health Issues: Diseases like H5N1 could unexpectedly affect production.

To address these problems, producers must adapt their businesses to changing market conditions. The dairy business is at a crossroads, so that the next few months will be interesting.

The Bottom Line

The dairy world is full of changes, bringing challenges and chances for those in the game. We’ve looked at the highs and lows in cheese and butter production and the unique issues facing places like California. It’s clear that being flexible and thinking ahead are key. How will these trends shape your business moves soon? Dive into these insights, think about their meaning, and explore innovative solutions for your needs. Stay informed, strategize proactively, and embrace the dynamic opportunities in the dairy market. We’d love to hear from you and work together as we untangle this complex world.

Learn more:

Check out the US dairy market: less cheese, more butter, and price changes. What does this mean for farm profits? Learn more here.

Summary:

The U.S. dairy industry is seeing mixed results, with cheese production down 1.7% in November and butter production up 4.4%. While European dairy prices are rising, American cheese and butter prices have stayed stable due to balanced domestic supply and demand. California, a major dairy state, faces slow milk production recovery after a bird flu outbreak, impacting overall U.S. output. Domestic demand and exports are weak, making profitability challenging. Yet, demand is high, with 21% more butter consumed, which could raise prices. Dairy farms need innovative strategies to adapt, like focusing on the strong butter market and dealing with weaker cheese production. The U.S. market stability contrasts with European trends due to different factors like supply, demand, and currency changes. California’s bird flu and weather issues have also slowed milk production, affecting cheese and butter. Farmers should innovate, diversify crops, and explore new markets to stay profitable. While butter production will likely grow, cheese may struggle with production challenges. Adapting to market changes, staying informed, and embracing new opportunities are crucial for success in the dairy industry.

Key Takeaways:

  • U.S. cheese production in November saw a decline, contrasting with an unexpected surge in butter output.
  • Despite producing more butter, domestic consumption was extreme, showing a 21% growth year-over-year compared to cheese consumption, which weakened.
  • European dairy markets exhibit upward price trends, while U.S. prices remain stable despite weak domestic demand.
  • The recovery of milk production in California has been slower than anticipated post-bird flu, affecting the overall U.S. dairy supply.
  • An ongoing bird flu outbreak challenges California dairy farms, influencing milk production levels.
  • The U.S. is experiencing organic milk production trends, suggesting consumer preference shifts.
  • The market outlook remains complex, and monitoring production, pricing, and demands are necessary to maintain profitability closely.

It’s hard to believe that butter production increased in the U.S. while cheese production decreased. It’s happening just like that as of January 2025. Cheese production in the U.S. decreased by 1.7% compared to the previous month’s forecast, while butter production saw a significant increase of 4.4%. The 2.0% drop in cheese sales and stock changes could lead to financial challenges for producers, affecting their profitability. On the other hand, the 21% rise in butter disappearance in the United States shows that consumers want it a lot, which could help farms make more money.

Production TypeNovember Production (2024)Forecast Change (%)Domestic Disappearance Change (%)
Cheese1.152 billion lbs-1.7%-2.0%
ButterIncreased+4.4%+21.0%

U.S. Dairy Production: A Story of Contrasts with Declining Cheese and Rising Butter Output 

The most recent U.S. dairy data shows that butter production is increasing while cheese production is slowing down. While cheese production decreased by 1.7% in November, butter production increased by 4.4%, influencing the dynamics of the dairy industry. This mix of production affects the profits of dairy farms.

If there is less cheese, prices might stay the same or increase. However, the 2.0% drop in domestic consumption makes it hard for prices to increase, which is terrible for dairy producers.

On the other hand, more butter is being made. With 21% more butter being eaten in the United States, demand is high and could cause prices to go up. But it’s still hard to balance this with weak exports. Farmers who raise dairy have to deal with a tricky market where local demand is high but international interest is low.

Dairy farms need to make smart moves to make money. Cheese producers must get used to insufficient cheese and make the most of the strong butter market. They must pay attention to market signals and change their plans to make the most money in this ever-changing environment.

The Dairy Pricing Duality: European Surge versus American Stability

The world of dairy pricing is like a mix of lively European trends and steady American vibes. European Union (EU) dairy prices are rising, sparking market attention. 

Here’s why those prices are climbing in the EU: 

  • Limited Supply: Weather issues and new rules have made supply tighter.
  • Higher Costs: European farmers face increased bills for feed and fuel.
  • Steady Demand: People in the EU are buying more dairy, partly due to diet trends.
  • Currency Changes: A strong Euro affects exports, changing trade patterns.

Conversely, in the US, cheese and butter prices are staying steady. Here’s what’s keeping them stable: 

  • Production Balance: Less cheese but more butter production keeps things balanced.
  • Market Balance at Home: Low demand for cheese matches the drop in production, preventing big price swings.
  • Exports: While exports aren’t booming, they’re steady enough to keep prices calm.
  • Traders’ Confidence: Traders believe in stable futures, which lowers speculation.

These elements highlight a split dairy world, with the EU on the move and the US holding steady. Grasping these reasons helps dairy farmers make sense of the market and plan wisely in today’s environment.

California: The Powerhouse State Grappling with Dairy Production Delays

California, which makes a lot of milk in the U.S., has problems. The return of milk output is taking longer than expected. What’s the reason for the delay, then? First, the ongoing bird flu outbreak has significantly impacted the state dairy farms. The flu has made finding healthy animals and production facilities harder, slowing recovery. Stuck with a heavy bag on your foot makes it hard to move forward.

Another problem is weather-related problems. Unpredictable weather patterns, such as droughts and sudden temperature changes, make growing crops more difficult. Nature knows how to surprise us, doesn’t she?

What’s the bigger picture here? The U.S. dairy supply chain is under considerable stress because of problems in California’s production. As the top state, California’s slow recovery has reduced the milk supply, affecting cheese and butter production.

We need to monitor California’s recovery timeline. This timeline is crucial for stabilizing state production and the U.S. dairy market. Let’s hope things improve soon.

U.S. Dairy Demand Dynamics: Navigating Shifts Amidst a Changing Market

Demand problems can’t be ignored in the U.S. dairy industry, which is constantly changing. The demand for dairy products in the United States is going down, and exports are also going down. But why is this happening? What does this mean for the market as a whole?

There are several reasons why demand at home is low. More people are choosing foods that don’t contain dairy, and plant-based milk products are becoming more popular for ethical, health, and environmental reasons. This means that traditional dairy products are losing market share. Also, people who care more about their health are eating less dairy.

Issues around the world make exporting difficult. Trade disputes and geopolitical tensions still affect U.S. dairy exports, which makes business unpredictable. Because of new rules and taxes, American dairy products are not as competitive as those from other countries. Changes in currencies make things worse by hurting exports to important markets.

The dairy market is being affected by these trends in a big way. If dairy farmers don’t change their production to match changes in consumer habits, they may lose money as demand changes. Farmers must know these problems and change how they do things to stay profitable.

Farmers should develop new ideas and cultivate different types of crops to address these problems. They could also develop products that add value or enter new markets locally and internationally. For example, changing the names of dairy products and working with stores and marketing groups could help them sell more.

As the market changes, those with a stake in it must balance tradition and change to stay competitive and meet customer needs. Although challenging, addressing these problems could lead to new growth opportunities.

Strategies for the Future: Navigating Health Crises and Organic Trends in Dairy

The dairy industry is experiencing significant changes that could affect its future. For example, fifteen more states have adopted the USDA’s National Milk Testing Strategy for H5N1. This is being done to protect the country’s dairy supply from bird flu, which still affects California dairy farms. The ongoing outbreak shows the importance of strong security and surveillance measures.

At the same time, more organic milk is being made in the U.S. The market is changing because more people are choosing organic food. After all, it is better for their health and the environment. Because organic milk is gaining a larger market share, production methods may need to change.

Overall, these changes show how complicated and constantly changing the dairy business is. It must deal with health risks and changing consumer tastes, which requires dairy producers to be flexible and develop innovative plans.

Riding the Dairy Rollercoaster: Navigating Complexities and Opportunities Ahead 

Due to high demand, butter production looks strong in the coming months. In November, production rose by a massive 21%. Cheese production, on the other hand, may have problems now that it has dropped 1.7%. Prices are also getting a lot of attention. Dairy prices are going up in the EU, similar to what happened at the Global Dairy Trade events, though the changes weren’t as significant as people thought they would be. In the US, stable prices for cheese and butter may be good news, but prices for nonfat dry milk (NFDM) and dry whey are tricky. Farmers will see both problems and ways to make money. Many people want to buy butter, which is good, but problems with making cheese and lower milk yields, especially in California after the bird flu, could make things less happy. Producers have to balance what the market wants with what they can make.

Here’s what to watch moving forward: 

  • Global Economy: Economic changes worldwide can affect demand and prices. It is essential to monitor politics and trade policies.
  • California’s Recovery: How quickly California’s dairy industry recovers will impact the nation’s milk supply.
  • Consumer Habits: More interest in organic products and changing diets can shift how much dairy people consume.
  • Health Issues: Diseases like H5N1 could unexpectedly affect production.

To address these problems, producers must adapt their businesses to changing market conditions. The dairy business is at a crossroads, so that the next few months will be interesting.

The Bottom Line

The dairy world is full of changes, bringing challenges and chances for those in the game. We’ve looked at the highs and lows in cheese and butter production and the unique issues facing places like California. It’s clear that being flexible and thinking ahead are key. How will these trends shape your business moves soon? Dive into these insights, think about their meaning, and explore innovative solutions for your needs. Stay informed, strategize proactively, and embrace the dynamic opportunities in the dairy market. We’d love to hear from you and work together as we untangle this complex world.

Learn more: