1. Weekly News

Argentina

Milk Production in Argentina Faces Inflation, Drought, and Evolving Strategies

Argentine dairy farmers face a turbulent environment due to high inflation, prolonged drought, and declining national demand for dairy products. Milk production dropped 14% year-on-year (YoY) in early 2024, straining farmers as rising production costs outpace increased milk prices. Many farmers are adopting robotic milking and strategic crossbreeding practices, focusing on grass-fed systems and Montbeliarde genetics to boost efficiency, sustainability, and milk solids output. While current earnings of USD 0.42 per liter (L) provide some relief, elevated costs compel innovative strategies to maintain profitability without herd expansion. Efforts center on enhancing resilience to climatic, economic, and political fluctuations by optimizing grazing and leveraging hybrid vigor.

Indonesia

50 Australian Dairy Cows and 600 Livestock Arrive in Indonesia to Boost Dairy Sector

Indonesia has received 50 pregnant Frisian Holstein dairy cows from Australia, marking a strategic step to accelerate investment in the livestock sector. This initiative aligns with the government's goals to achieve national milk self-sufficiency and support the Makan Bergizi Gratis (free nutritious meal program) and milk consumption programs. Additionally, 600 livestock, including 400 Droper sheep and 200 Saanen goats, have been brought into the country as part of similar efforts. These livestock will be placed in Lampung and other locations to support local milk supply and production in the coming years.

Netherlands

Dutch Dairy Groups Propose Partial Buyout Scheme to Ease Manure Market Pressure

Dutch dairy organizations are discussing a partial buyout scheme for milk cows to reduce pressure on the manure market. The proposed plan would allow farmers to voluntarily reduce their herd by 10 to 20% over three years in exchange for government compensation, with the scheme expected to open in March. The initiative would involve government funding, while sector organizations like dairy companies feed suppliers, and banks would provide additional supportive policies. A potential fund could be created to ensure participants maintain investment opportunities despite lower herd sizes.

South Korea

South Korean Dairy Farmers Struggle After Heavy Snowfall

Severe snowfall in South Korea's central regions, particularly in Gyeonggi, Seoul, and Chungcheong, has caused extensive damage to dairy farms. Over 200 farms have suffered from collapsed barns, damaged infrastructure, and livestock casualties due to the weight of wet snow. Many farms need help accessing resources for milk production as their facilities are rendered unusable. Farmers struggle to maintain dairy operations, with some selling livestock to mitigate losses. In response, efforts like low-interest loans and relocation of cows to safe areas have been implemented but need to be increased. The Korean Dairy Association urges the government to implement comprehensive relief measures, including disaster area designations, increased recovery funds, and extended policy loan support to stabilize the industry.

Turkey

Jersey Breeding Project Boosts Dairy Production in Samsun

In Samsun, Turkey, the ongoing 'Jersey' project has boosted artificial insemination for the Jersey breed, increasing milk production by breeding dairy-specific heifers. The project focuses on disadvantaged areas with challenges like limited insemination services, harsh winters, and difficult geography to support livestock producers and improve income.

Ukraine

Ukraine's Dairy Sector Faces Steady Decline Amid Falling Livestock Numbers

According to the Union of Dairy Enterprises of Ukraine (СМПУ), Ukraine's dairy sector will continue its negative trend into 2025. The number of dairy cows is expected to drop by over 6.5%, with fewer than 1.2 million cows by the start of 2025, down from 2 million in 2018, representing a 40% reduction over seven years. Half of this decline is attributed to households, while commercial farms lost 20%. Despite a 1.4 times increase in cow productivity over the last decade, milk production has dropped by 29%, from 10.3 million tons in 2017 to an estimated 7.3 million tons in 2024. Production by commercial farms remains stable, but household production has fallen by 43% since 2017.

Ukrainian Consumers Reduce Dairy Purchases Amid High Prices

Due to rising prices, Ukrainian consumers, particularly those with below-average incomes, are cutting back on dairy purchases. This has led dairy producers to scale back supplies to the domestic market. A shortage of raw milk, which accounts for 60% of production costs, has driven these price increases. Although some experts suggest demand reduction may stabilize raw milk prices by mid-Dec-24, others point to challenges like overreliance on exports and insufficient domestic production to meet demand. Additionally, Ukraine's dairy herd is shrinking, with estimates predicting a 6.5% reduction by the end of the year, exacerbating the supply-demand imbalance.

United Kingdom

Decline in Britain's Milking Herd Reflects Efficiency Focus

Britain's milking herd reached its lowest October figure in 2024, with 1.64 million heads, marking a 0.9% YoY decline. Great Britain's herd also fell 1.5% to 2.55 million heads, driven by decreases across most age groups except for 2 to 4-year-olds, which rose by 2,000 heads (+0.3%) due to the youngstock boom of 2021. Culling of older cows and reduced use of dairy semen, prompted by low milk prices, contributed to fewer youngstock under 2 years, down by 23,000 heads (2.5%). Analysts suggest these trends reflect improved herd efficiency and strategic management. Improved milk prices and easing input costs may encourage slight herd growth in the future.

United States

USDA Implements Nationwide Testing to Curb H5N1 Avian Influenza Spread in Dairy Cattle

The United States Department of Agriculture (USDA) has mandated nationwide testing of raw milk for Type A H5N1 highly pathogenic avian influenza (HPAI) to contain its spread in dairy herds, starting December 16 in six states before expanding nationwide. Detected in United States (US) dairy cows in Mar-24, the virus has infected over 700 herds across 15 states, with raw milk from infected cows showing high virus loads. While pasteurization ensures milk safety, the directive requires farms and processors to provide samples on request, report positive results, and facilitate disease tracing. This measure aims to swiftly control the outbreak, protect public health, and support efforts by veterinarians and industry stakeholders to eliminate the virus.

2. Weekly Pricing

Weekly Powdered Milk Pricing Important Exporters (USD/kg)

Yearly Change in Powdered Milk Pricing Important Exporters (W49 2023 to W49 2024)

Germany

The price has seen relative stability on a week-on-week (WoW) basis in the German dairy market, though it continues to show a consistent downward trend overall. Prices dropped to USD 2.54 per kilogram (kg) by W49, reflecting a 0.78% WoW drop, a 21.60% month-on-month (MoM) decrease, and a significant 38.20% YoY decline. The price drop is primarily driven by easing supply shortages as Germany recovers from earlier challenges like extreme heat and disease outbreaks that had previously impacted milk production. Despite these supply recovery efforts, milk yields are nearing seasonal lows, contributing to sustained downward pressure on market prices. The persistent decline indicates a market adjusting as supply chains stabilize, yet facing long-term production issues. Price volatility may continue as Germany balances recovery with these persistent supply-related hurdles.

Belgium

In the Belgian dairy market, prices have shown relative stability on both a WoW and MoM basis, with the price rising to USD 3.94 in W49, reflecting a 0.51% WoW increase and a 0.25% MoM change. However, a YoY drop of 3.43% is evident, primarily driven by improved supply this season despite persistent constraints. Despite strong milk demand in Europe, Belgium's dairy market maintains stable prices by balancing supply and demand through effective adjustments, highlighting its adaptability to supply pressures and consumer trends.

Netherlands

The Dutch milk market has shown relative stability WoW, with a slight 0.46% increase in W49 to USD 2.20/kg. However, MoM and YoY prices have declined by 1.79% and 20.86%, respectively. This drop is linked to easing earlier supply disruptions caused by disease, which had previously elevated prices. While supply is recovering, challenges like labor shortages, strict environmental regulations, and declining dairy cow numbers persist. To address these issues, Dutch dairy organizations propose a voluntary buyout scheme allowing farmers to reduce their herds by 10 to 20% over three years in exchange for government compensation. This initiative could stabilize supply pressures and influence increasing prices in the upcoming years.

France

In France, milk prices in W49 have experienced a 3.45% WoW and 5.35% MoM decline to USD 3.36/kg, reflecting a return to more balanced market conditions following months of high prices driven by tight supplies and market stabilization. Despite these short-term declines, YoY prices have risen by 8.04%, driven by a smaller supply this season than last year due to ongoing production challenges across the EU, such as bluetongue virus outbreaks, unfavorable weather, and strong international demand. Prices are expected to remain elevated compared to last season for the upcoming weeks, but WoW might continue to drop in the coming weeks.

Poland

In Poland, WoW prices have risen by 2.89%, while MoM prices dropped slightly by 2.73% to USD 2.49/kg due to market adjustments in W49. YoY prices have increased by 10.18%, reflecting a stabilization trend after recent price drops in W48. The Polish milk market is transitioning toward equilibrium as improved supply dynamics ease previous supply pressures. Although demand for milk has driven prices higher in the past, recent adjustments suggest the market is stabilizing. Additionally, the bluetongue outbreak in Southern Poland and drought conditions in Central and Eastern Europe are straining feed supplies, which could further influence price increases shortly.

3. Actionable Recommendations

Strengthen Dairy Sector Investments

Governments, private investors, and international organizations should prioritize strategic investments to support dairy production and market stability. Actions could include partnerships for importing high-yield livestock breeds like Frisian Holsteins, Droper sheep, or Saanen goats and investing in modern technologies such as automated milking systems and advanced crossbreeding methods. Infrastructure improvements, including cold chain logistics, storage facilities, and advanced grazing systems, should be implemented to streamline supply chains. Coordinated efforts through low-interest loans, subsidies, and research collaborations will accelerate these projects and ensure sustainable long-term growth in the dairy sector.

Promote Livestock Breeding Programs

Strategic funding should focus on livestock breeding programs like introducing high-yield dairy breeds, such as Jersey or Frisian Holsteins, to local herds. Governments and private sectors can partner with international breeders or offer financial incentives to encourage artificial insemination and breeding practices.

Support Climate Resilience Strategies

Investment in sustainable grazing systems, improved pasture management, and climate-smart agricultural practices can help combat drought and other environmental challenges affecting dairy production. These efforts should include innovative solutions like rainwater harvesting systems and drought-resistant fodder crops.

Sources: Tridge, Agri Holland NL, Agri Land IE, Agro Meat, Agro Portal UA, AHDB, CSN, Farmer PL, Farming UK, IHA, Milk News, Milk UA, Warta Ekonomi, WTVY