Here is John Hallo in our latest edition of the Inside Track, sharing updates on global dairy markets. In Edition 183, strong global milk supply continues across the globe, putting pressure on commodity pricing. Here’s the last Inside Track for the year.
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Hello and welcome to Maxum Foods Inside Track. Well, here we are, the last Inside Track for 2025, and only eight more sleeps until Santa comes. I hope everyone is keeping well and excited. Let’s have a look to see what’s happening in the dairy industry.
Having a look at whole milk, last night on the GDT we saw a 5.7% decrease. As we have stated in the past few Inside Tracks, there is some real bearish sentiment in the market at the moment, especially around whole milk powder, based on some really good milk production in all regions of the world. The US is up, EU, Argentina in South America, Australia and New Zealand are on the shoulder of their season. So milk production is good. Another element to this is that China was up 2.1% year-on-year on milk production for October. So even those guys are experiencing some good supply. Hence, demand is a little on the wane and people are generally in a hand-to-mouth cycle with procurement.
Moving across to skim milk powder, another small decline last night on the GDT, but relative to the other commodities, skim has been reasonably flat for the last six months, running along sort of five-year averages in price for New Zealand and Australia. Across the globe, it’s reasonably bearish sentiment; there’s still some good butter skim production throughout the globe. So demand seems to be holding up okay and probably better than other commodities at the moment, so pricing outlook is reasonably flat.
Having a look at butterfat, last night we saw a decrease in the GDT of 2%, which was a lot calmer than the result prior to that where it was down 12%. It looks as though last night buyers did see value in New Zealand butter pricing at the moment. Will that mean that demand will come back in at these levels? It is certainly running on the lower side of five-year averages. So there could be some value for New Zealand in the US. Conditions are still quite bearish with good oversupply and a lot of product on the export market, very similar to the EU. So, like I said, it is a good buying opportunity for Australia and New Zealand at the moment where pricing has come back to the lower end of five-year averages.
Having a look at cheese, globally a similar story to the other commodities, some good, healthy supply in both US, EU, Australia and New Zealand. In the US and EU, pricing is reasonably bearish, market conditions are reasonably bearish with that oversupply. Australia and New Zealand are a little bit more balanced, with some good strong demand. However, there is good production coming through on the shoulder of the season in both Australia and New Zealand. So, you could reasonably predict that it will be bearish conditions coming into Q1 with cheese.
Looking at whey and whey derivatives, a similar story again. Sweet whey is reasonably flat in demand and supply, so well balanced there, and the protein market just keeps on charging on. There is a real shortage of US WPC and WPI at the moment, causing quite a stir globally and pricing is on the incline. So they’re hard to get a hold of at the moment. However, at record prices, will that burn off demand in sports and infant nutrition?
Thanks very much for listening to today’s Inside Track and thanks very much for all your support throughout the year. Look forward to seeing you guys again next year and have a safe and very Merry Christmas.
