1. Weekly News

Australia

Australia's Dairy Sector Faces Supply Strain as Floods and Drought Drive Up Milk Costs

Severe floods in northern New South Wales and ongoing drought in Southern Australia have damaged dairy infrastructure, destroyed pastures, and disrupted production, significantly straining the dairy supply chain. Entire herds and essential equipment were lost, while isolation and power issues prevented milking. The dual impact of flood damage and rising feed costs is expected to drive up milk production costs, prompting calls for higher farmgate prices to support recovery. Limited national milk supply is likely to push prices higher when new season contracts are set on June 1.

Chile

Regional Production Gains Drive Chile’s Rising Raw Milk Receipts

Chile's national raw milk receipts reached 574.3 million liters (L) through Mar-25, marking a 6.5% year-on-year (YoY) increase driven by sustained demand in the dairy industry, according to data from National Federation of Milk Producers (Fedeleche) and the Office of Agricultural Studies and Policies (Odepa). Regional growth varied, with significant YoY increases in Los Lagos by 5.0%, Los Ríos by 11.8%, Bio-Bio by 59.4%, Ñuble by 11.8%, and Araucanía by 4.5%. The Metropolitan Region was the only area to experience a decline of 11.7% YoY. This trend indicates a stable domestic milk supply supported by regional production growth.

South Korea

South Korean Delegation Inspects Belarusian Milk Processing Plants to Boost Trade

A South Korean delegation inspected major Belarusian milk processing plants from May 21 to 28 to assess their veterinary and sanitary standards compliance. The visit was to evaluate production conditions, quality control systems, and food safety measures at enterprises exporting to South Korea. The mission supports efforts to strengthen bilateral cooperation, expand trade, and facilitate the entry of new Belarusian dairy products into the South Korean market.

United States

Wisconsin Launches Mandatory Milk Testing for Avian Flu

In W21, Wisconsin dairy farms began mandatory milk testing for the H5N1 avian flu virus as part of a national surveillance effort led by the United States Department of Agriculture (USDA). The state's Department of Agriculture, Trade and Consumer Protection (DATCP) will conduct monthly sampling using existing milk quality testing procedures, minimizing disruptions for producers. The Wisconsin Veterinary Diagnostic Laboratory will process approximately 1,250 samples weekly.

Though Wisconsin was among the last states to join the program, officials say the state-specific approach was necessary due to its large number of dairy farms. No cases of H5N1 have been detected in Wisconsin dairy cattle to date, despite over 6,000 tests since Apr-24. Farms testing positive will be quarantined but can continue shipping pasteurized milk, which federal agencies confirm remains safe for consumption. Wisconsin may seek reduced surveillance requirements if no virus is found after three months.

Milk Payments Cut for Washington Dairy Farmers Amid Darigold Plant Delays

Dairy farmers in Whatcom and Skagit counties, Washington, are facing significant reductions in milk payments from Darigold, a farmer-owned cooperative, with cuts of USD 4 per hundredweight (cwt) expected to last through 2025. About USD 2.50 of the reduction is being directed toward funding Darigold's delayed processing facility in Pasco, with the remainder covering operating losses.

Darigold, a farmer-owned cooperative, purchases milk from approximately 95% of Whatcom County's dairy farms. The payment cuts are straining farm profitability, and limiting resources for maintenance and upgrades. Farmers expressed concern but acknowledged the long-term benefits of the new facility, which is now scheduled to open in mid-2025, over a year behind schedule and reportedly USD 300 million over budget. Many conventional Washington dairy farms remain reliant on Darigold, with farmers calling the situation a financial crisis but expressing hope the investment will strengthen the cooperative in the long term.

US Milk Output Marks Strongest Growth Since 2022

US milk production rose 1.5% YoY in Apr-25 to 19.4 billion pounds (lbs), the strongest growth since 2022. The increase was driven by modest productivity gains and herd expansion, up 89,000 cows from Apr-24 and 5,000 from Mar-25. Average production per cow rose by 11 lbs nationally. Analysts see this as a sign of positive industry momentum, though future growth may be limited by heifer availability and market conditions. Rising output may pressure prices but supports both domestic and export demand.

Apr-25 US Milk Production Rises in April, Led by Texas and Kansas

US milk production rose in Apr-25 compared to the same month last year, with 18 states contributing a combined increase of 387 million lbs. Texas led the volume gains with a rise of 145 million lbs, followed by Idaho with 59 million lbs and Kansas with 39 million lbs. Kansas also posted the largest YoY percentage increase at 11.37%. In contrast, six states recorded declines totaling 91 million lbs: California, down 49 million lbs; Washington, down 24 million lbs; and Florida, down 7 million lbs. Washington saw the steepest percentage decline at 4.51% YoY.

2. Weekly Pricing

Weekly Powdered Milk Pricing Important Exporters (USD/kg)

Yearly Change in Powdered Milk Pricing Important Exporters (W21 2024 to W21 2025) 

Netherlands

In W21, milk prices in the Netherlands rose by 12.71% week-on-week (WoW) to USD 2.66 per kilogram (kg), marking a 12.24% YoY increase from USD 2.37/kg. This sharp rise reflects tightening market conditions, with Q1-2025 milk production falling 3% amid reduced herd sizes, labor shortages, weaker farm profitability, and persistent climate challenges. Despite the decline in output, prices remain elevated due to robust export demand from China and Southeast Asia. Additionally, lingering concerns over Foot-and-Mouth Disease (FMD) in parts of Europe may further constrain supply, reinforcing upward price momentum.

3. Actionable Recommendations

Enhance Climate and Infrastructure Resilience in Key Producing Regions

Governments and industry stakeholders in Australia and Washington State should invest in disaster-resilient infrastructure, such as elevated milking systems and decentralized power solutions. Additionally, introducing emergency relief funds and targeted feed subsidies would help mitigate rising production costs and stabilize supply following climate-related disruptions.

Promote Strategic Export Diversification and Market Access

Export-oriented producers in regions like Belarus and the Netherlands should deepen bilateral partnerships and ensure compliance with destination market standards (e.g., South Korea) to diversify sales and mitigate domestic supply pressures. This includes investing in certification systems, traceability technologies, and country-specific marketing strategies to improve competitiveness.

Support Farm Profitability Through Cooperative Reform and Efficiency Measures

In areas facing financial strain from cooperative decisions, such as Washington State, dairy farmers should advocate for greater transparency in cooperative investment strategies and seek joint efficiency programs. Emphasis on automation, herd productivity, and cost-sharing models can help balance short-term financial pressures with long-term processing and export gains.

Sources: Tridge, Wisconsin Public Radio, The Seattle Times, Dairy Herd, Farm Progress, Ag Proud, Financial Review, Belarusian Telegraph Agency