1. Weekly News

Peru

Increased Support for Dairy Farmers in Peru

Dairy farmers in Peru are urging the Ministry of Agrarian Development and Irrigation (MIDAGRI) for greater support to enhance milk purchases from micro and small enterprises. The Holstein Association of Peru, an organization dedicated to improving and promoting Holstein cattle breeding in Peru, emphasizes that with appropriate political decisions and private sector backing, the dairy sector could regain its previous growth rate of 6% annually, which was last seen in 2008. Current annual growth stands at 2.4%, despite the daily fresh milk production reaching approximately 6 million liters (L) from around 945,549 cows in 2023. Producers highlight the need for government policies that stimulate state purchases and increase per capita consumption of fresh milk to meet social program demands, ultimately benefiting the economy and local communities.

China

China’s Measures to Stabilize Beef and Dairy Production

On September 26, 2024, China's Ministry of Agriculture and Rural Affairs announced plans to stabilize beef and dairy production while enhancing support for farms facing challenges. A joint circular with six other departments outlines efforts to stabilize the basic production capacity of beef and dairy cattle, encouraging local authorities to expedite projects that improve the quality of breeding cows. Key initiatives include establishing a white-list system for beef and dairy farms, providing financial and insurance support, and extending loans to farms experiencing temporary difficulties. The circular also emphasizes bolstering beef and dairy industries in impoverished areas, launching campaigns to promote the nutritional value of fresh meat and milk, and implementing milk programs for students to boost consumption. In the first half of 2024, beef production rose by 3.9% year-on-year (YoY), while milk production increased by 3.4%, contributing to a total dairy output of 42.81 million tons in 2023, ranking China fourth globally.

Israel

Factors Influencing Vaccination Intentions Among Israeli Dairy Farmers

Researchers from the Hebrew University and Wageningen University have identified crucial factors affecting vaccination intentions among Israeli dairy farmers. By examining five diseases impacting dairy cattle –Botulism, Bovine Ephemeral Fever, Brucellosis, Lumpy Skin Disease, and Rabies – the research underscores the significant role of social pressure. It highlights the need for enhanced communication between veterinarians and farmers to optimize voluntary vaccination programs. The study involved responses from 340 dairy farmers and their veterinarians, revealing that vaccination intentions varied by disease, with Botulism eliciting the highest intention and Bovine Ephemeral Fever the lowest. While veterinarians' opinions greatly influenced decisions regarding Lumpy Skin Disease, there was a disconnect between veterinarians' recommendations and farmers' perceptions overall. The findings advocate for tailored interventions and improved risk communication training to bridge this gap and enhance the effectiveness of voluntary vaccination efforts, ultimately supporting livestock health and productivity.

Netherlands

Declining Milk Production in the Netherlands Amidst EU Increases

Dutch dairy farms have faced milk production decline throughout 2024, joining Ireland and the United Kingdom (UK) as "shrinking countries," while overall European Union (EU) production has increased, particularly in Poland, France, and Italy. RaboResearch anticipates global milk production growth in 2025, though this may be tempered by fewer dairy cows in Europe, the United States (US), and South America, alongside risks from bluetongue outbreaks in Europe and bird flu in the US. Geopolitical tensions in the Middle East threaten global trade routes, and China’s investigation into alleged dumping of European dairy may impact future trade. Meanwhile, analysts are watching New Zealand for potential production increases due to better weather, while low prices are driving Chinese dairy farmers out of business, possibly creating export opportunities for other nations if demand rises in 2025.

United States

USDA Raises Dairy Price Forecasts Amid Lower Production Projections

The United States Department of Agriculture (USDA) increased its forecast for wholesale dairy prices, driven by lower-than-expected milk production due to drought conditions, feed costs, and herd reductions. Revised projections show decreased output for cheese, butter, nonfat dry milk, and whey. Despite the lowered production, demand remains strong, supporting higher prices into 2024. International factors, including global trade challenges and potential demand shifts in Asia, add to the market's complexity.

Vietnam

Vietnamese Investment in Dairy Industry to Support Indonesia's Nutritional Initiatives

The Indonesian Ministry of Agriculture has announced a collaboration with Vietnamese investors to develop the dairy cattle and milk processing industry in Central Sulawesi Province. This investment aligns with the nutritional initiatives of the country’s president-elect, focusing on providing free milk to students, pregnant women, and breastfeeding mothers. The TH Group, Vietnam's largest industrial and cattle farming company, will spearhead this effort, contributing to 50% of Vietnam's milk supply. A suitable site for the investment has been identified in Napu, Central Sulawesi, where land management rights have been secured for a 6,647-hectare (ha) area, facilitating the project's acceleration. The regional government is encouraged to support these initiatives to ensure investor retention and successful implementation.

2. Weekly Pricing

Weekly Powdered Milk Pricing Important Exporters (USD/kg)

Yearly Change in Powdered Milk Pricing Important Exporters (W39 2023 to W39 2024)

Germany

In W39, milk prices in Germany rose by 37.25% YoY, from USD 2.98 per kilogram (kg) in 2023 to USD 4.09/kg. This increase was driven by rising raw milk prices and reduced production due to climatic challenges. The bluetongue virus outbreaks negatively impacted livestock health, while high temperatures caused heat stress in dairy cattle, reducing milk yield. Over the past month, prices surged by 31.51%, with a significant week-on-week (WoW) increase of 12.67% as supply tightness intensified.

Belgium

Milk prices in Belgium increased by 5.12% YoY in W39, from USD 3.71/kg in 2023 to USD 3.90/kg in 2024. Prices rose by 3.45% month-on-month (MoM), and WoW growth remained relatively steady at 0.78%. These increases are largely attributed to the heat waves in Western Europe during Aug-24, which reduced milk yields. Heat stress impacts dairy cows' ability to produce milk, lowering yields. Additionally, high demand for butter and cheese has kept the market competitive, further driving up prices.

Netherlands

Milk prices in the Netherlands increased by 9.28% YoY in W39, from USD 2.37/kg in 2023 to USD 2.59/kg in 2024. However, WoW prices fell slightly by 2.26%, showing a minor correction after overall price increases. The MoM increase remained modest at 0.39%. The WoW drop can be attributed to increased EU-wide production, particularly in Poland, France, and Italy, which has offset lower output from countries like the Netherlands, Ireland, and the UK. Additionally, concerns about geopolitical tensions in the Middle East and China’s scrutiny of European dairy imports have added uncertainty to global dairy markets, contributing to price volatility despite long-term supply constraints.

France

French milk prices increased significantly YoY by 58.63% in W39, rising from USD 2.49/kg in 2023 to USD 3.95/kg in 2024. This spike is largely due to reduced EU-wide milk production, driven by climatic challenges and livestock health issues, notably bluetongue outbreaks, which impacted yields. However, a WoW decline of 3.19% in W39 2024 can be explained by recent increases in EU production in countries like Poland and Italy, which have helped ease supply constraints. Furthermore, global market uncertainty, influenced by geopolitical tensions and potential disruptions in trade, adds volatility to the market.

Poland

In Poland, milk prices declined by 1.15% YoY, dropping from USD 2.60/kg in 2023 to USD 2.57 in 2024. This decrease is largely due to increased milk production in Poland and other EU countries recently, despite earlier overall production drops. The MoM increase of 14.73% highlights the overall supply drop in the EU.

3. Actionable Recommendations

Explore Non-European Suppliers

Importers should strategically source milk products from regions outside Europe, such as Peru, China, Vietnam, Israel, and the US. They should establish direct partnerships with local producers to effectively source and ensure stable supply chains. Engaging in discussions with Peruvian dairy farmers can facilitate fresh milk procurement, while China's government support may open avenues for joint ventures. Additionally, understanding import regulations and logistics in these regions will be crucial. It’s important to assess market conditions and consumer demand to align sourcing strategies with regional opportunities.

Enhance Vaccination Awareness

Dairy producers should prioritize vaccination programs to combat key diseases such as bovine viral diarrhea, brucellosis, lumpy skin disease, and foot-and-mouth disease. Enhancing communication between veterinarians and farmers is crucial to improve vaccination uptake and address concerns. Implementing regular training sessions and awareness campaigns can inform producers about vaccination benefits and foster a culture of proactive health management. By prioritizing livestock health through vaccinations, producers can stabilize production outputs, reduce disease transmission, and improve overall herd productivity and profitability.

Sources: Tridge, Dairy Reporter, La Republica PE, Nieuweoogst, Noticias Agricolas, The Cattle Site, Warta Ekonomi