1. Weekly News

Australia

Strong Growth in Australia’s Dairy Exports in Jul-24

In Jul-24, Australia’s skimmed milk powder exports increased by 102.5% year-on-year (YoY), reaching 15.21 thousand metric tons (mt). However, whole milk powder exports saw a 9.2% YoY decline. Despite these contrasting trends, Australia’s milk powder sector remains competitive globally.

In addition, the country’s milk fat exports also experienced significant growth, with total fat exports rising 171.1% YoY during this period. In particular, dehydrated milk fat exports increased by 78.3% YoY, while butter exports soared by 224.9% YoY, reflecting the growing global demand for dairy fats driven by shifting food preferences.

Moreover, Australia’s cheese exports increased by 36.3% YoY in Jul-24, driven by demand from Japan. This growth underscores Australian cheese’s international solid appeal and highlights the Asia-Pacific region’s rising dairy consumption.

Germany

Germany’s Raw Milk Prices Rising Continuously Since Sep-23

The average price for conventional raw milk in Germany has been steadily increasing since Sep-24. In Jul-24, the country’s price for raw milk with 4% fat and 3.4% protein rose by USD 8.4/mt month-on-month (MoM), reaching USD 517/mt. Meanwhile, the price of organic milk increased by USD 4.13/mt, reaching USD 632/mt. This consistent price rise reflects heightened demand and market dynamics in Germany’s dairy sector.

Portugal

Portugal Reports First Bluetongue Outbreak

Portugal has reported its first case of Bluetongue serotype 3 (BTV-3) in livestock on sheep farms. This makes Portugal the latest addition to the list of European countries affected by the virus, including the Netherlands, Germany, Belgium, Luxembourg, Switzerland, Denmark, Norway, Sweden, the Czech Republic, France, and the United Kingdom (UK). This virus was first identified in the European Union (EU) last fall, and it causes severe symptoms and high mortality in sheep and cows, leading to temporary restrictions on animal movement in Portugal.

Russia

Lipetsk’s Milk Yield Increased YoY in 2024

From Jan-24 to Jul-24, the annual average milk yield per cow in Russia's Lipetsk region increased by 0.29 mt YoY to 5.73 mt. The highest recorded yield was 7.59 mt. This growth is attributed to improvements in cattle genetics, feeding systems, construction and modernization of dairy complexes, and state support initiatives for the dairy sector. In addition, the region's total milk output reached 153 thousand mt during this period.

Ukraine

Ukraine’s Dairy Exports Rise 10% YoY in 2024

From Jan-24 to Aug-24, Ukraine’s dairy product exports increased by 10% YoY, reaching 82.96 thousand mt. Export revenue rose 8% YoY during this period, amounting to USD 199.49 million. In Aug-24, dairy exports grew by 10% MoM to 10.38 thousand mt, with the export value rising 13% MoM to USD 24.92 million. The leading export categories in Aug-24 were condensed milk and cream, which took 26% of the total export value, followed by butter, ice cream, and cheese, which took 26%,18%, and 17%, respectively. In 2023, Ukraine’s total dairy exports amounted to 108 thousand mt, valued at USD 253 million.

2. Weekly News

Weekly Powdered Milk Pricing Important Exporters (USD/kg)

Yearly Change in Powdered Milk Pricing Important Exporters (W38 2023 to W38 2024)

Germany

In W38, Germany’s whole powdered milk prices rose to USD 3.63 per kilogram (kg), showing a 13.44% week-on-week (WoW), a 14.51% MoM and a 21% YoY increase. These price increases are driven by rising raw milk prices and reduced milk production across Germany due to climatic challenges and the spread of the bluetongue virus. As bluetongue outbreaks continue to affect livestock health, and with hot weather causing heat stress in dairy cattle, Germany’s milk yield has declined, tightening supply and pushing prices upward.

Belgium

Belgium’s whole powdered milk prices reached USD 3.87/kg in W38, reflecting a modest 0.26% WoW rise, a 1.57% MoM increase, and a 6.91% YoY gain. The heat waves in Western Europe, particularly in Aug-24, have reduced milk yields, contributing to the upward trend. In addition, the high demand for butter and cheese has kept the market competitive, adding pressure to whole powdered milk prices.

Netherlands

The skimmed milk powder prices in the Netherlands rose to USD 2.65/kg in W38, marking a 6% WoW and a 3.11% MoM increase. The YoY price increased by 13.72% compared to USD 2.33/kg in W38, 2023. This bullish trend is driven by weather-related supply constraints, as the heat stress experienced by dairy cattle across Europe has reduced milk yields. In addition, the market focus on butter and cheese production ahead of the Christmas season is set to hamper milk powder production, pushing up prices.

France

France’s semi-skimmed milk powder prices in W38 climbed to USD 4.08/kg, increasing by 3.55% WoW, 4.08% MoM, and 66.53% YoY. The significant rise is mainly attributed to the bluetongue virus outbreaks in Northern France and high summer temperatures, significantly reducing milk production. These conditions have further constrained milk powder production, causing prices to soar. The French government’s efforts to address the bluetongue outbreak, including planned vaccination campaigns, aim to mitigate further livestock losses.

Poland

Poland’s skimmed milk powder prices reached USD 2.75/kg in W38, marking an 18.53% WoW and 12.24% MoM increase, despite a 7% YoY decline. The weekly and monthly upward price trend is mainly attributed to reduced milk production caused by drought conditions that impacted the country in Aug-24. However, China’s anti-subsidy investigation into the EU’s dairy exports has also significantly affected Poland’s dairy sector. This investigation has damaged Poland’s competitiveness in the Chinese dairy export market, a key market where Poland has heavily invested over the past decade.

3. Actionable Recommendations

Strengthen Domestic Dairy Production

Dairy farmers in Germany should prioritize improving animal health and resilience to climatic challenges. This can be achieved by investing in heat stress mitigation strategies, such as enhancing housing conditions, providing cooling systems, and optimizing nutritional plans for cattle during high-temperature periods. Collaboration with veterinary services to monitor and manage livestock health, especially in light of the bluetongue outbreaks, is crucial for maintaining and potentially increasing milk yields.

Diversify Dairy Markets

Polish dairy producers and exporters should explore alternative markets beyond China to reduce dependency and mitigate risks associated with international investigations. Identifying emerging markets in Southeast Asia or Africa, where demand for dairy products is rising, can provide new opportunities. Tailoring marketing strategies and product offerings to meet the specific needs of these new markets will enhance competitiveness and offset potential losses from existing markets.

Enhance Dairy Export Competitiveness

Belgian dairy exporters and trade associations should engage with trade and diplomatic channels to address market access issues and reduce barriers to Belgian dairy products in international markets. Building solid partnerships with importers and distributors in target countries and launching promotional campaigns highlighting Belgian dairy products' quality and safety will help gain consumer trust and expand market reach.

Sources: Tridge, MilkUA, Nieuwe Oogst, Milknews,Agrovesti