Market outlook

Due to our market intelligence and efficient decision making, Bdairy is able to keep its business partners up to date about the newest market trends, offer competitive pricing and act as a sparring partner for dairy procurement and sales decisions. By gathering and communicating the latest market insights, we help our partners to stay at least one step ahead. Your Bdairy market wizard is happy to provide you with a personalised approach.
Subscribe to our mailing list to receive our monthly market outlook!

Market Outlook | 6 February 2020

Knowledge is power, so every month we make a detailed analysis of the latest developments in the dairy market. This month our Senior Export Manager, Martin Doorduin, tells you everything you need to know.

Skimmed Milk Powder

Between January and November of 2019 the cumulative milk collections for the global top five milk producing area’s (Europe, etc) was up slightly by 0.03%.  Although only a slight increase, its significance lies in the fact that this is the first time a growth on the previous year has been recorded.

Collections for Milk solids rose by 0.8% during the same period. 

Between January and November 2019 Europe recorded a growth of 1.3% in the production of milk solids. This resulted in a SMP production growth of 0.9% whilst the European Export of SMP increased strongly by 22%. From 741 KMT in 2018 to 905 KMT in 2019 (January – November 2019). This increase was supported by the European surplus of Intervention SMP stocks at the beginning of 2019. These stocks have since then depleted resulting in a very strong upward pressure on pricing. In addition to that Europe is facing more competition from United States. 

Looking at the fundamentals Bdairy outlook on SMP is firm as the SMP market is clean and we expect the demand to remain strong. The market sentiment can have a big impact although the absence of physical SMP stocks. The current developments related to the Corona virus is a good example of this. 

For instance during the first half of January 2020 the sentiment for SMP was bullish with high prices on GDT and a strong global demand resulting in SMP prices around EUR 2650/MT FCA Europe. However, during the second half of January, this changed due to the aforementioned uncertainties and the prices on the EEX fell below EUR 2600/MT FCA for quarter 2 2020 . A similar trend was visible on the world market with a drop of approximately USD 100/MT – from USD 3000/MT CFR to around USD 2900/MT CFR. 

It is Bdairy’s opinion that the SMP market remains bearish in the short term and bullish in the long term. A strong correction in the SMP market is expected if prices fall much further. 

The above is based on the assumption that the Corona virus will be contained on a short term notice.  


Between January and November 2019 Europe produced 2,8% more Butter and Butteroil compared to the same period in 2018. The European butterfat production increased from almost 2000KMT to 2055KMT (from January 2019 to November 2019). While butterfat consumption inside Europe is expected to be stable compared to last year, more butterfat has been exported outside Europe. As a result of that exports from Europe increased by 31% from 151KMT to 198KMT (January – November 2018 vs January – November 2019). 

As Europe remained competitive on the world market during December and January, strong export figures are expected to continue. The question is whether butterfat exports from Europe will be strong enough to avoid Europe building up stocks. 

Over the last couple of months, the European Butterfat market remained stable with prices ranging between EUR 3500 – EUR 3600/MT FCA Europe. This price is supported by strong export demand and butter export has played an important role maintaining this price level. However, with the milk and butterfat production in Europe increasing it will be a challenge to keep current prices. Additionally if the bearish sentiment on the world market continues, it is likely that it will affect the global butterfat market as well. Recent price drops on whole milk powder in NZX confirm this sentiment. 

Bdairy is of the opinion that butterfat will remain relatively stable in the short term at prices around EUR 3450 – EUR 3550/MT FCA. Long term, taking into account the production increase of butter and the bearish sentiment, we expect a downward pressure on the price of butter. 

Click the button below to download a pdf version of our Market Outlook.

Download Market Outlook