1. Weekly News

Brazil

Key Challenges in Rio Grande do Sul's Dairy Sector

In Oct-24, a study on the challenges faced by Rio Grande do Sul's dairy sector was presented at the Dairy and Dairy Products Sectoral Chamber meeting. It shows a stagnant milk production of approximately 2.98 billion liters (L) for the year, marking 12 years without growth and dropping to third place among southern states. Key issues include enhancing productivity, addressing labor shortages, and rising production costs. The meeting also addressed the need for accessible funding from the Fund for the Development of the Dairy Production Chain (Fundoleite), with the Agriculture Secretary promising efforts to expedite resource availability.

Greece

Greek Dairy Production Forecasts Face Challenges

Greek dairy forecasts indicate a 0.2% year-on-year (YoY) decline in 2025 estimates as Greek farmers encounter challenges such as higher input costs, environmental restrictions, and diseases, forcing the sector to limit production marginally. According to a recent report from the United States Department of Agriculture (USDA), cow milk deliveries in Greece are projected to decrease to 145.3 million tons in 2025, despite the 2024 estimate being 145.6 million tons, a 0.3% increase from 2023 levels. Milk production has been impacted by a reduced number of cows, which will only partially offset by increased productivity. Meanwhile, average milk prices in production showed a recovery in early 2024. However, domestic consumption of fluid milk in Greece is expected to decline to 23.5 million tons in 2025, reflecting a decrease of 0.3%. The reduction in milk production will also affect its use in the industry, compelling processors to make strategic decisions regarding their products.

India

India’s Dairy Sector Growth Forecast for 2025

The USDA Foreign Agricultural Service (FAS) anticipates that India's milk-producing cow herd will reach 62 million by 2025, reflecting less than 1% growth YoY. This slight increase is supported by government initiatives to advance the national dairy sector, expected high milk prices, favorable weather, stable fodder availability, and no major disease outbreaks. Cow milk production is projected to rise to 103.2 million metric tons (mmt) in 2025, up from 101 mmt in 2024. Contributing factors include enhanced government funding for dairy infrastructure, technical support for farmers, improved milk yields, and rising prices facilitated by active dairy cooperatives. Additionally, favorable rainfall patterns and recovery from past cattle diseases are poised to boost production in the coming years.

Indonesia

Five International Dairy Companies Eye Investment Opportunities in Indonesia

According to Indonesia’s Agriculture Minister, five international dairy companies from Qatar, Brazil, the United States (US), and Vietnam are keen on investing in Indonesia's dairy industry. The Minister mentioned plans for discussions with the Vietnamese Ambassador to explore further investment in milk processing. The government is encouraging these investors to establish dairy processing facilities in Central Sulawesi, Kalimantan, and Merauke, highlighting the abundance of available land. To facilitate these investments, the Agriculture Ministry aims to ensure a supportive environment for investors, emphasizing the importance of creating a comfortable investment climate in the agricultural sector.

Ireland

Budget Increase for Dairy Beef Welfare Scheme in Ireland

The budget for Ireland's Dairy Beef Welfare Scheme (DBWS) is set to exceed USD 10.86 million (EUR 10 million) annually due to an increased payment rate from USD 21.71 to USD 43.43 (EUR 20 to EUR 40) per calf, effective in 2025. This adjustment raises the total budget over the four-year scheme (2024 to 2027) to USD 33.39 million (EUR 30.75 million), up from the previously estimated USD 27.14 million (EUR 25 million). The Minister for Agriculture, Food and the Marine confirmed that an annual budget of USD 11.13 million (EUR 10.25 million) is needed to accommodate this increase. Additional payment rate scenarios were outlined, indicating potential budgets of up to USD 13.30 million (EUR 12.25 million) per year if the payment rate rises to USD 54.28 (EUR 50) per calf. However, eligibility and the number of applications will depend on market conditions and compliance rates, with any funding increases subject to state aid regulations.

Russia

Tver Region's Milk Production Sees Significant Growth in 2024

From Jan-24 to Sep-24, farms in the Tver region increased milk production by 14.4% to 172.2 thousand tons, with agricultural organizations accounting for over 80% of this total. During the same period, 163.6 thousand tons were sold, marking an 11.5% increase YoY. The trend of higher milk yield per cow continues, with an average of 4,942 kilograms (kg) per cow across all farms (up 10.8%) and 5,660 kg per cow in agricultural organizations (up 12%). As of early Oct-24, the total cattle population in the Tver region stood at 82.4 thousand heads, consistent with the previous year, including 34.8 thousand cows, reflecting a 3.2% increase.

15.17% Milk Production Surge in Chuvashia in 2024

In Chuvashia, Russia, the milk production of agricultural organizations rose by 15.7% over the first nine months of the year, driven by a 7.4% increase in cow productivity and a 2% growth in cattle numbers. Notably, the region is enhancing its dairy farming capabilities, with significant investments in livestock facilities, including a new complex for raising cattle with an investment of USD 3.97 million (RUB 387 million). Additionally, milk processing capacities have increased by 44.7% over five years, contributing to a robust local dairy sector.

Spain

Spanish Milk Production Declines Due to Climate and Disease Challenges

Spanish dairy farmers are experiencing a notable decline in milk production, with some regions reporting up to a 25% drop in collection rates. Factors include climate change, the spread of Epizootic Hemorrhagic Disease (EHE) affecting over 95% of dairy farms in areas like Galicia, and severe weather from Hurricane Kirk, which destroyed essential maize forage. EHE has caused high cow mortality and a drop in productivity, while forage shortages from Hurricane Kirk increased production costs. The Union of Small Farmers and Ranchers (UPA) is urging milk processors to raise milk prices to at least USD 0.54/L (EUR 0.50/L) to help farmers manage these elevated costs and sustain production.

Ukraine

Optimism in Milk Production in Ukraine Attributed to Declining Cattle Numbers

As of October 1, 2024, Ukraine's milk production faces challenges due to a 7% decrease in the overall cattle population, totaling 2.29 million heads, with 1.24 million cows. The industrial sector holds 922,900 cattle, reflecting a 1% decline, while the household sector has seen a 12% drop, particularly affecting cow numbers. Despite these declines, there is cautious optimism for milk production growth, especially in Mykolaiv and Cherkasy regions, where new dairy farms are being established and existing facilities are modernizing to enhance milk yields. At least 40 farms are upgrading to boost milk output, focusing on high-yield cow populations.

United Kingdom

UK Milk Production and Dairy Markets Experience Volatility Caused by Weather and Demand Shifts

The United Kingdom (UK) milk production sector faced challenges in 2024 due to poor weather and high input costs, causing a 0.9% YoY decline, with Sep-24 showing only a brief recovery thanks to better conditions. The milking herd decreased by 0.3%, and calf registrations dipped by 0.5% in the first half of the year, reflecting a longer-term contraction. Tight global milk supplies and high demand pushed milk prices to the highest levels since 2022, with the UK's average farmgate price reaching USD 0.53 (GBP 0.411) in Aug-24 and continuing upward into Oct-24. While demand for milk itself has slightly softened, higher costs and decreased supply are expected to keep prices elevated through the season.

United States

US Milk Production Sees YoY Growth Amid Decline in Cow Numbers

In Sep-24, US milk production reached 18.194 billion pounds (lbs), marking a slight 0.1% increase YoY, although production dipped by 3.9% compared to Aug-24. The USDA reported a continued decline in cow numbers, with 9.328 million heads, down 38 thousand from last year. However, milk output per cow rose by 9 lbs from Sep-23 to 1,950 kg, with notable gains in states like Georgia and Texas. Regional factors, including weather and feed costs, affected state production variances. The third-quarter total production also showed a slight increase to 56 billion lbs, although cow numbers continued their decline.

Reduced Cull Cow Slaughter May Boost US Milk Production

Despite elevated beef prices, the US dairy sector is experiencing a significant decline in cull cow slaughter, which could lead to increased milk production. According to USDA data released on Oct-24, Sep-24 saw approximately 210.4 thousand dairy cull cows marketed, marking a decrease of 30.1 thousand from the previous year and the lowest September total since 2007. This trend reflects 56 consecutive weeks of lower dairy market cow slaughter compared to last year. The current dairy herd remains stable at about 9.328 million cows, with a culling rate of 2.3%. As year-to-date cull cow slaughter has fallen to 2.06 heads, down 323.9 thousand YoY, this reduced culling may support higher milk production levels in the coming months.

2. Weekly Pricing

Weekly Powdered Milk Pricing Important Exporters (USD/kg)

Yearly Change in Powdered Milk Pricing Important Exporters (W43 2023 to W43 2024)

Germany

In Germany, milk prices in W43 dropped by 5.19% week-on-week (WoW) to USD 3.84/kg, adjusting from a recent high as supply constraints eased. The month-on-month (MoM) rise of 7.56% and a YoY increase of 1.32% still indicate lingering supply pressures; however, they are now beginning to moderate. Earlier in 2024, prices climbed due to reduced supply, impacted by extreme heat and the bluetongue virus, significantly strained production. Cooler temperatures and improved production capacity have started to relieve these pressures. With winter nearing and output set to rise, prices may stabilize.

Belgium

In Belgium, milk prices have shown relative stability, with W43 prices remaining unchanged at USD 3.85/kg, reflecting a stable market condition. The WoW price remains constant, while MoM and YoY prices have dropped minimally by 1.53% and 0.77%, respectively. This stability comes amid ongoing productivity improvements in Belgium's dairy sector, where dairy cows' average lifetime milk production reached a record 31,323 kg for the 2023/24 season. The rise in high-yield cows signifies notable efficiency gains, which could stabilize milk prices in the long run. If productivity trends continue and external market pressures remain manageable, prices may hold steady or even drop.

Netherlands

In the Netherlands, milk prices rose to USD 2.54/kg in W43, reflecting a 13.39% increase WoW and a 4.53% rise MoM. This surge is largely due to supply constraints linked to bluetongue virus outbreaks affecting dairy cattle, which reduce milk production despite the virus not being fatal. These challenges and global supply issues like highly pathogenic avian influenza (HPAI) keep prices elevated. However, YoY prices dropped by 8.30%, indicating more favorable supply conditions this season than last. Continued monitoring of animal health and production efficiency will stabilize supply and pricing in the Netherlands.

France

In France, milk prices reached USD 3.73/kg in W43, reflecting a slight increase of 1.08% WoW and a decline of 2.61% MoM, indicating relative stability as prices have fluctuated within a narrow range. However, prices have surged significantly by 33.21% YoY. Despite the recovery of milk supply in France and Europe following earlier disruptions from adverse weather and bluetongue virus outbreaks, prices remain elevated due to persistent supply challenges. As summer effects ease, France's milk supply and pricing are expected to stabilize.

Poland

In Poland, milk prices stood at USD 2.64/kg in W43, reflecting a WoW decline of 3.30%, indicating relative stability in pricing. However, MoM prices increased by 16.81%, and YoY prices rose by 7.32%. This upward trend can be attributed to tight supply conditions in European and global markets and growing demand for Polish milk, mainly from Ukraine. As these factors persist, prices will remain high in the upcoming weeks.

3. Actionable Recommendations

Diversify Sourcing Strategies for Powdered Milk

European importers should diversify their sourcing strategies for powdered milk by establishing partnerships with reliable international producers from regions like New Zealand, Australia, and the US, where supply levels are more stable. Conducting thorough market research to identify potential suppliers based on quality and pricing is essential, followed by negotiating long-term contracts to secure consistent supply at favorable rates. Implementing strict quality assurance programs will ensure that imported powdered milk meets European standards while exploring emerging markets in Asia and South America can provide additional competitive options. Utilizing supply chain management technology will optimize logistics and inventory tracking, ultimately mitigating supply risks and effectively meeting the growing demand for powdered milk.

Enhance Resilience in Dairy Farming

To effectively manage the impacts of weather on milk production, dairy farmers should implement resilient dairy farming practices. Farmers should invest in climate-resilient livestock and advanced technologies. This involves selecting breeds that can withstand extreme weather conditions, such as heat-tolerant cows like Brahman, Jersey, Guernsey, Sahiwal, and N'Dama, which maintain productivity during hot spells. Farmers should also adopt precision agriculture technologies, including sensors and weather forecasting systems, to monitor environmental conditions and make timely adjustments in feeding and housing. Enhancing facilities with climate-controlled barns and shade structures will help protect cows from temperature extremes. Farmers can improve resilience against weather variability by integrating these practices and maintaining consistent milk production.

Sources: Tridge, AHDB, AG Proud, Agri Land, Agro Times, China Farming, Farminguk, Farm Weekly, Milk News, Milk UA, Portal do Agronegocios, Radio Progreso de Ijui, The Cattle Site, Tyrokomos, Warta Ekonomi,