Dairy Trends: European prices on a slow decline

European dairy prices are continuing their slow but steady trend downwards, in line with predictions in the futures market which puts the EU and US at odds with New Zealand in terms of market sentiment.

New Zealand markets are flying it, if the Global Dairy Trade (GDT) is anything to go by. At last week’s auction, it increased by 3.7% and at this week’s pulse auction, whole milk powder (WMP) increased to €3,989/t, while the price at the main auction last week was €4,058/t.

This is still below the European price for WMP at €4,255/t, but prices are converging with €70/t taken off European WMP.

Butter prices dropped by €40/t to €7,055/t while cheese prices dropped by €50/t to €4,840/t for cheddar. The only positive movement was for skim milk powder (SMP), which increased by €45/t, somewhat offsetting the reduction in butter prices. At €2,490/t, European SMP is trading at a significant discount to the GDT price at €2,759/t.

In terms of supply, globally we are seeing milk supply increase in early 2025 driven by increased supply in the US and New Zealand. Europe and Australia are more or less flat, while China is back.

New Zealand is having a cracker of a season. While it ended 2024 up 2.1%, the new season since August is actually recording a 4.42% increase on the previous year.

Full-year milk supply in the Netherlands in 2024 was down 1.7%, Germany was back 0.6%, while France and Poland were both up, with France bucking recent trends to deliver a 1.6% increase, while Poland was up 3.9% compared with 2023.