1. Weekly News

Brazil

Minas Gerais Strengthens Brucellosis Prevention Measures in Dairy Cattle

Minas Gerais, Brazil's largest milk producer, is enhancing its brucellosis prevention efforts by requiring farmers to vaccinate heifers aged three to eight months by July 31 and report the vaccinations by August 10. The Mineiro Institute of Agriculture (IMA) has already vaccinated over one million animals, aiming for an 80% coverage rate. This initiative is crucial to safeguard public health, particularly due to the state's significant artisanal cheese production. Compliance involves inspections and adherence to specific regulations, with benefits including improved herd health and access to new markets.

Canada

Canada Invests USD 8.5 Million to Boost Dairy Farm Sustainability and Safety

Canada has announced a USD 8.5 million investment to support Dairy Farmers of Canada (DFC) in enhancing sustainability and safety within the dairy industry. The funding will be used to improve the DairyTrace program and the proAction quality assurance program. The investment includes up to USD 5 million to advance sustainability initiatives, including environmental stewardship and assessing practices related to greenhouse gas emissions, water use, and biodiversity. Additionally, up to USD 3.57 million will strengthen DairyTrace to enhance animal health, public trust, and traceability. This support aims to bolster the industry's sustainability, reduce disease spread, and ensure high standards in dairy production.

China

China to Limit Milk and Beef Production Amid Falling Prices

On July 29, 2024, Reuters reported that China plans to restrict milk and beef production to prevent further price declines, exacerbated by reduced consumer spending due to economic slowdown and increased livestock production, particularly pork. Prices for pork, beef, dairy products, and poultry have fallen, with beef and raw milk prices dropping by 12.1% and 12.5%, respectively, in the first half of the year. Raw milk prices decreased USD 0.45 per liter (CNY 3.20/L). A senior livestock specialist at the Ministry of Agriculture stated that measures will be taken to optimize herd structure by culling old and low-productivity cows and better aligning production with market demand. Despite the price drops, overall milk production rose by 3.4% in the first half of 2024.

Netherlands

Friesland Leads in Milk Production in the Netherlands Despite Overijssel's Numerous Dairy Farms

Although Overijssel hosts the most dairy farms in the Netherlands, Friesland leads in milk production, contributing 17.8% of Dutch milk in 2023 from 298,000 cows across 2,306 farms. Overijssel and Gelderland also significantly contribute to the Dutch milk pool, supplying 17.0% and 15.5%, respectively. Zeeland, Flevoland, and Limburg produce the least milk and have the fewest cows and dairy farms. Friesland has the largest grassland area, followed by Gelderland and Overijssel. Grazing increased in all provinces, with North Holland leading at 97% of farms grazing their cows. North Brabant has the most corn, followed by Gelderland and Overijssel.

Russia

Top Dairy Producers in Russia See Growth Amid Industry Consolidation

In Russia, the dairy industry has seen significant growth, with 15 companies surpassing 100,000 tons of annual milk production and the top 30 producers accounting for 16% of the country's total output in 2023. EkoNiva leads with 1.256 million tons, followed by Agrokompleks im. N. I. Tkachev and Agropromkomplektatsiya. The sector's commercial milk production increased by 5% to 25.8 million tons. New entrants include Sayanmoloko and SPSSPK Ekoptitsa, with major investments boosting sector development. The Ministry of Agriculture's new support measures aim to consolidate smaller farms, reflecting a global trend towards larger dairy complexes to enhance production efficiency and market competitiveness.

Ukraine

Ukraine's Cattle Population Declined by 7% in First Half of 2024

As of July 1, 2024, Ukraine's cattle population decreased by 7% compared to the same date last year, totaling 2.38 million heads, including 1.26 million cows. The industrial sector saw a 1% decline in cattle to 922,500 heads and a 2% decrease in cows to 379,800 heads. The household sector experienced an 11% drop in cattle to 1.45 million heads, with a 9% reduction in cows to 880,200 heads. Consequently, 39% of the cattle were held by industrial enterprises, while 61% were in household farms.

Heat and Power Outages Affect Ukraine's Milk Production but Overall Output Remains High

Severe heat and power outages from Russian missile strikes on energy infrastructure have disrupted ventilation systems on Ukrainian farms, reducing cow productivity and raw milk production. Despite these challenges, milk output on dairy farms still surpassed last year's levels. Preliminary data from the Ministry of Agrarian Policy indicate that in June 2024, all farms produced 699.6 thousand tons of raw milk, down 4% from May-24 and 3% from Jun-23. In the first half of 2024, total milk production was 3.544 million tons, 2% less than the previous year. Industrial farms produced 250.8 thousand tons in June, a 5% decrease from May-24 but a 7% increase from Jun-23. Household farms produced 448.8 thousand tons in June, a 4% decline from May-24 and a 9% decrease from Jun-23. Despite adverse conditions, milk production in agricultural enterprises in regions like Mykolaiv, Kharkiv, and Ternopil saw significant increases. Beef production also faced a decline, with 89.1 thousand tons produced in the first half of 2024, 8% less than the previous year.

United Kingdom

Great Britain Dairy Producers Decline Amid Tightening Farm Margins

As of Apr-24, there are an estimated 7,130 dairy producers in Great Britain, a 5.8% decline from the previous year. Despite historically high milk prices, a drop from 2022 peaks, along with high cull cow prices, inflationary pressures, and increased borrowing costs, has tightened farm margins, prompting many producers to exit the industry, particularly over the winter months. Regulatory pressures have also contributed to this decline. However, milk production for the 2023/24 season only decreased by 0.2% year-on-year (YoY), supported by favorable grass growth despite wet weather challenges. Average milk production per farm increased, indicating a trend towards larger farm sizes, while the overall Great Britain dairy herd size remained stable. The survey by Agriculture and Horticulture Development Board (AHDB), covering 82% of Great Britain milk volumes, offers a accurate count of active producers.

United States

US Milk Production Declines in Jun-24

In Jun-24, United States (US) milk production fell by approximately 1% YoY, totaling 18.767 billion pounds (lbs). The decline was attributed to a reduction in cow numbers, which decreased by 62,000 to 9.335 million heads. The average milk output per cow also dropped by 6 lbs to 2,010 lbs. The 24 major dairy states saw a similar trend with a 0.8% decrease in milk production and a reduction of 37,000 cows. States like South Dakota and Texas reported increased milk production, while New Mexico and California experienced significant declines. Overall, the trend reflects ongoing challenges in the dairy industry, including regional weather impacts, disease, and feed cost variations.

Transportation of Livestock Risks Avian Flu Spread in the US

According to experts, transportation of dairy cattle in the US poses a significant risk of the spread of avian influenza H5N1. Confinement and poor conditions during transport create ideal conditions for disease transmission. Since Mar-24, 51 dairy farms across nine states have reported H5N1 outbreaks. The virus has been found in more than 200 mammals, including cattle, and has spread rapidly, partly due to transportation practices. The USDA has implemented mandatory testing and reporting measures to mitigate the risk, but experts argue for comprehensive regulatory updates to address these risks and improve animal welfare.

Colorado Implements Statewide Dairy Herd Surveillance to Combat HPAI Outbreak

On July 22, 2024, the Colorado Department of Agriculture announced a statewide surveillance program for commercial dairy herds to combat the spread of highly pathogenic avian influenza (HPAI). This initiative mandates regular bulk-tank testing for HPAI across dairy farms, in response to the virus’s transmission from dairy operations to poultry, which has resulted in the death of over 3.2 million chickens. The Colorado Department of Agriculture, alongside the Colorado Department of Public Health and Environment and supported by the United States Department of Agriculture (USDA), will oversee this surveillance. Weekly testing of milk samples will be required to safeguard the state’s dairy and poultry sectors and limit the virus's spread. Currently, Colorado has reported the highest number of H5N1 cases in cattle in the US, with 47 confirmed cases, and has also observed infections among poultry workers. Despite these developments, the Centers for Disease Control and Prevention (CDC) maintains that the risk to public health remains minimal.

2. Weekly Pricing

Weekly Powdered Milk Pricing Important Exporters (USD/kg)

Yearly Change in Powdered Milk Pricing Important Exporters (W30 2023 to W30 2024)

Germany

In Germany, powdered milk prices in USD per kilogram (kg) have been relatively stable, with prices at USD 2.97 in W30 2024, reflecting a 0.68% week-over-week (WoW) increase and a 1.71% month-over-month (MoM) rise. These fluctuations are mainly due to varying currency exchange rates and market stability driven by shifting demand. However, a significant YoY drop of 22.66% from USD 3.84 in W30 2023 to USD 2.97 in W30 2024 is observed, attributed to a higher milk supply in 2024 and a stable supply across the EU, contrasting with the tighter conditions in 2023. Additionally, the ongoing avian influenza, H7N5, affecting cattle in Germany may impact supply in the upcoming weeks, potentially influencing future price trends.

Belgium

In Belgium, powdered whole milk prices have shown relative stability, with a slight MoM decrease of 1.33 to USD 3.70/kg in W30 2024 from USD 3.75/kg in W27 2024. The WoW change is a drop of 0.54%, and the YoY change is a drop of 2.37%. These changes are mainly caused by shifts in currency exchange rates and fluctuations in market stability driven by demand. According to the USDA, while fluid milk production in the EU is set to increase by 0.1% YoY in 2024, whole milk powder production is expected to drop by 10%, potentially leading to price increases in the upcoming months. The Belgian Dairy Industry Federation (CBL) has urged for a long-term policy to enhance sustainable dairy production, highlighting the industry's low-profit margins despite generating USD 7.65 million (EUR 7 billion) in 2023, and the need for clearer policies to ensure future milk supply and industry growth.

Netherlands

In the Netherlands, skimmed milk powder prices have recently shown a 7.69% increase WoW and a 4.85% rise MoM, reaching USD 2.38/kg by W30 of 2024. This price volatility is influenced by lower supply in the Netherlands and the EU market. The USDA forecasts a 4% decline in skimmed milk powder production across the EU in 2024, which could lead to further price increases in the Netherlands later in the year. Additionally, environmental regulations aimed at reducing nitrogen emissions in the Netherlands are expected to further shrink the country's dairy herd, compounding economic challenges and contributing to a reduction in overall milk production capacity.

France

In France, the price of semi-skimmed milk powder notably increased, rising from USD 2.48/kg in W30 2023 to USD 3.77/kg by W30 2024, marking a significant 52.02% YoY rise. This upward trend includes a 4.14% MoM increase from W27 2024. This price surge reflects ongoing milk production challenges, as profitability has been under pressure due to falling farm-gate milk prices and high production costs for energy, fertilizers, and labor. The anticipated decrease in the number of dairy farmers, primarily affecting smaller and less efficient operations, further contributes to the price volatility in the market.

Poland

In Poland, skimmed milk powder prices have experienced notable changes, with a YoY increase of 9.36%, rising from USD 2.67/kg in W30 2023 to USD 2.92/kg in W30 2024. Prices saw a MoM rise of 3.55% from W29 2024, reflecting the 4% drop in skimmed milk production in the EU in 2024. However, a WoW drop of 18.44% from the previous week highlights significant short-term price fluctuations driven by variable costs that have been unstable since early 2024. Despite a modest rise in productivity, persistent high production costs and farm-gate milk price declines continue to pressure Polish dairy farmers.

3. Actionable Recommendations

Enhance Biosecurity Measures to Prevent Avian Flu in Cattle

To curb the spread of avian influenza among dairy cattle, all countries should implement preventive measures. For example, Brazil should enhance biosecurity measures, integrating stringent protocols for farm access, disinfection, and protective clothing for workers. Canada can allocate part of its USD 8.5 million investment to boost biosecurity and integrate avian flu surveillance within the DairyTrace program. Russia, China, and the Netherlands should standardize biosecurity protocols across larger dairy complexes and support smaller farms. Ukraine needs robust infrastructure and emergency response plans, while the UK should update regulations and provide support for transitioning farms. The US must enforce stricter transportation biosecurity, mandatory testing, and statewide coordination.

Strengthening Ukraine's Milk Industry Amid Cattle Population Decline

To address the 7% decline in Ukraine's cattle population and its impact on the milk industry, the Ministry of Agrarian Policy and Food of Ukraine and producer organizations should implement support programs for household farms, focusing on maintaining and growing cattle numbers to stabilize milk production. Investments in infrastructure, led by government and private sector partnerships, are essential to mitigate the effects of power outages and extreme weather on productivity. Encouraging the expansion and modernization of industrial farms will offset household sector declines and ensure a stable milk supply. Strengthening biosecurity measures and disease prevention programs will protect cattle health and secure milk production from disease-related losses. Additionally, promoting agricultural diversification will reduce reliance on cattle farming, enhance overall farm resilience, and stabilize the milk market.

Mitigating US Production Declines Through Trade with Canada and Latin America

To address the decline in US milk production in Jun-24, exacerbated by avian influenza, the US should consider increasing milk imports from sources such as Canada and Central and South America. With its strong dairy sector and proximity, Canada offers a reliable supply of high-quality milk that can efficiently meet US demand. Central American countries like Costa Rica and Guatemala, as well as South American nations such as Argentina and Brazil, are emerging as significant milk producers with growing export capabilities. By establishing or expanding trade agreements with these countries, the US can ensure a stable and cost-effective supply of liquid and powdered milk while mitigating the impacts of domestic production declines.

Sources: Tridge, AgroMeat, AgProud, Agro Portal, Agro Times, AHDB, Business France, Down to Earth, JustFood, Meat+Poultry, MilkUA, Portal do Agronegocio, SpecAgro, The Brussels Times, The Dairy Site, The Cattle Site, The Witness, USDA, Veeteelt