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Market Outlook | 8 February 2024

General introduction

During the month of January we witnessed a yo-yoing effect in prices, due to rapidly changing market sentiment on the global supply and demand situation.

Within the EU there is a mixed outlook regarding milk collections during 2024. Eastern EU countries, broadly speaking, are expecting a small increase in collections. Western EU countries are expecting collections to be flat/show a slight increase. This means that the overall market sentiment is for slightly improved collections across the block. The average milk price for Jan 2024 = 46 EUR per 100 kg vs 56 EUR per 100 kg during 2023 and 42 EUR per 100 kg during 2022. With animal feed prices low, farmers should be happy enough with the current milk price. Some countries within the EU, such as Ireland, are 2 months behind on milk collections, leading to some short-term supply gaps in the market, which is keeping prices for products such as butter in check.

In Oceania, milk collections remain behind by 0.34% YoY. However, in December, collections increased by 0.9% YoY. We are expecting the usual seasonal trend to follow in Oceania and for collections to drop between now and the next flush, meaning EU powders should be more competitive into Asia.

In the USA, we have limited new data on milk collections to report. However, the number of US dairy cows dropped in December by 0.2%, and the forward expectation for milk collections in the USA is low, due to fewer cows and low farm gate milk prices.

Demand worldwide seems steady. However, the conflict in the Red Sea makes transit times problematic for the Asian region, and therefore some buyers are bringing their purchasing requirements forward. We remain optimistic, but cautious, on forward milk collections globally and do see demand returning in the global marketplace.

Skimmed Milk Powder

In January the SMP market bottomed out at EUR 2,350/MT EXW. This was mainly driven by low demand from Asia and low domestic demand from Europe and the USA, combined with strong competition coming out of New Zealand.

Figures show that the main exporting regions have little SMP stock available. A telling figure is the Jan–Nov 2023 EU SMP production YoY, which shows a decrease in total volume produced of 8.7%. When speaking to SMP producers worldwide, they indeed inform us that they have little stock available. But when speaking to traders, many still seem to carry a physical long position or have product in stock at warehouses.

However, with the most important SMP importing regions facing a slow economy, and with SMP being mostly an export reliant market, we expect demand to continue to be slow for the short term.

Similar to butter, the bearish sentiment of SMP changed in the first week of February to a more stable to slightly bullish sentiment and it seems to have reached a floor. As of today we see EU SMP trading at EUR 2,400/MT EXW and USA NFDM at USD 1.21/lb EXW.

Bdairy outlook: Short-term stable to bearish, long-term bullish


The fat market was volatile during January. We saw cream and butter hitting new lows, with cream bottoming out at EUR 5,800/MT on the spot market and NBD butter at EUR 5,100/MT. The main reason for the fall in cream prices was the higher milk output in some countries, combined with a decreasing cheese market, which caused less milk to be allocated to cheese and more to cream. As of today, we see cream trading at EUR 5,900/MT EXW EU, Irish winter butter at EUR 5,300/MT and NBD Fresh Frozen at EUR 5,450/MT.

There seems to be quite a lot of demand at around EUR 5,000/MT levels for butter. We assume purchasing managers are using last year’s February price as a reference point (EUR 4,557/MT). This might act as a sturdy support level. We feel that not all consumers are covered for Q2 as yet and surely not for Q3 2024. We believe that only a big drop in cream or a substantial drop in prices from Ireland or Poland could cause a break in these support levels.

As of today, we are not seeing many interesting offers coming out of Poland, and the Irish producers do not seem to be in a rush to sell either.

Bdairy outlook: Neutral to slightly bearish



Whereas we saw a large spread between SMP and BMP in Q4 (as high as EUR 300–400/MT), this spread has narrowed to roughly EUR 150/MT during the first months of 2024. The main reason for this being that SMP prices have fallen, but BMP prices have held up steadily. On the back of more butter production in the EU over the last few months, more BMP should become available. Combined with weaker demand from the largest export region for BMP, Southeast Asia, this could cause the BMP market to drop slightly.

We see EU BMP trading at EUR 2,220/MT EXW and US BMP at USD 1.09/lb EXW.

Bdairy outlook: Stable to slightly bearish

Full Cream Milk Powder

With FCMP reaching its lowest level for the last five years in August–September 2023, the only way that the global FCMP market could go since then was up. Oceanian FCMP is trading at USD 3,365/MT EXW, South American FCMP at USD 3,560/MT EXW and EU FCMP at EUR 3,550/MT EXW.

With SMP and butter weakening in January, FCMP followed and bottomed out at EUR 3,500/MT EXW.

Most EU buyers seem in no rush to cover their Q2 and Q3 needs for FCMP, whilst SMP and butter are weakening.

Even though domestic EU SMP demand is slow, the logistics disruptions in the Red Sea are scaring away MENA buyers from Oceania, driving up demand from the EU.

With more FCMP being manufactured during the EU flush period in Q2, the market is expected to be balanced.

Bdairy outlook: Stable 


During January we have seen plenty of offers for SWP come to market from the EU, where cheese production has been +0.7% Dec 23 vs Nov 23. EU cheese production now is +1.3% YoY, meaning that there is plenty of whey concentrate in the market.

In the EU, prices of whey concentrate are now between EUR 300–400/MT FCA vs EUR 500–550/MT FCA in December. However, drying costs remain high due to the energy issues in the EU market, meaning that SWP has not dropped as much.

However, we are seeing SWP prices in the EU range between EUR 850–950/MT FCA, depending on region and quality, vs EUR 950–1,050/MT FCA during January. Feed whey futures dropped from EUR 819/MT FCA to EUR 770/MT FCA during January, reflecting weakness in the feed market and good availability of concentrate.

EU whey is now the cheapest source globally, as the US whey market seems to have limited availability, despite the high level of cheese production. Plenty of US whey was sold forward during Q3/Q4 of 2023, and we are hearing that suppliers in the USA are behind on contracts of whey and lactose. US whey is now pricing at around USD 1,050–1,105/MT FCA vs USD 880–950/MT FCA during December.

Demand for whey has now slowed in Asia, with many buyers already covered for Q2. Cheese valorisation in the EU remains very favourable and we are expecting the availability of whey to be good during Q2/Q3. However, high prices in the USA will prevent EU prices from dropping too much.

Bdairy outlook: Slightly bearish


With EU lactose trading at EUR 550/mt EXW and US lactose at USD.30/IBS EXW, we are close to the lowest prices seen over the last three years.

The main drivers for these low prices are strong lactose production, on the back of high WPC/WPI production, and a weak feed/infant market worldwide. The weak economy from China weighs in heavily here, as China is the largest infant and feed market in the world, and also the largest lactose importer.

On the other hand, stocks are depleting and there appears to be little older material in the market.

Bdairy outlook: Stable at lower levels

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