1. Weekly News

Global

Global Dairy Production to Grow by 0.8% in 2025 Amid Market Uncertainties

Dutch multinational bank Rabobank forecasts a 0.8% increase in global milk production in 2025, marking the first sustained growth since 2020. The recovery is driven by improving producer prices and favorable feed costs, despite lingering risks such as geopolitical tensions and trade uncertainties, particularly in the United States (US). While milk production in the US has rebounded, global dairy demand remains uneven, with emerging markets showing signs of weakening consumer purchasing power. Rabobank also notes that potential disease outbreaks in Europe and the US have been contained, reducing immediate threats to supply stability.

Belarus

Brest Region Increases Milk Production by 6.6% in Jan-25

In Jan-25, the Brest Region boosted milk production by 6.6%, reaching 203,500 tons, 12,000 tons more than the previous year. Milk sales rose 7.2% to over 188,000 tons, with product commercialization at 92.4%. Lyakhovichi District led growth with a 17.9% increase, followed by Gantsevichi with 15.6% and Pinsk with 10.8%. In 2024, four major farms—Zhuravlinoe, Ruzhany-Agro, Parokhonskoye, and Belovezhsky—produced over 50,000 tons each, contributing over 220,000 tons to the region’s total, setting new production and productivity records.

Belarus Triples Dairy Exports to Pakistan in 2024

In 2024, Belarus increased its exports of skimmed milk powder and whey to Pakistan threefold. This growth was highlighted during talks between the Belarusian Deputy Minister of Agriculture and Pakistan’s Federal Minister of Commerce. Bilateral trade in food and agricultural raw materials rose by 36.5% year-on-year (YoY), with infant cereals being the top Belarusian export. Both countries are working on certifying veterinary vaccines and expanding cooperation in livestock and fisheries. Belarus aims to further increase exports and diversify trade with Pakistan.

Europe

EU Milk Production to Decline by 0.2% Annually as Herd Size Shrinks

The European Union (EU) Agricultural Outlook predicts a 0.2% annual decline in European milk production until 2035, despite a 0.9% productivity increase per cow. Herd sizes in key dairy-producing nations like the Netherlands, Belgium, and Denmark are shrinking due to strict environmental policies, limiting overall output. However, Poland and other Eastern EU countries show growth potential. Higher-quality dairy products are expected to gain traction, with 46% of milk projected to go into cheese and whey by 2035. Global milk production continues to rise at 1.8% per year, with the US expanding its export share to 20% by 2035. While Chinese milk powder imports are stagnating, demand remains strong in North Africa, the Middle East, and Southeast Asia.

Germany

Germany Eases Restrictions After FMD Outbreak

Germany continues to lift restrictions imposed after a Foot-and-Mouth Disease (FMD) outbreak on January 10, 2025, in a water buffalo herd, citing the success of containment measures. No new infections have been reported, and the European Commission (EC) approved the reclassification of a 3-kilometer (km) protection zone to a monitoring zone, with restrictions set to expire by February 24. Germany is also preparing a request to the World Organisation for Animal Health (WOAH) to officially declare the country free of the disease, potentially lifting export restrictions on meat and dairy products. The impact on the German pork market remains moderate, as restrictions are regional and do not affect the entire country.

Russia

Russia Expands Dairy Production to Meet Growing Demand

Russia's dairy industry saw significant growth in 2024, with increased production across nearly all product categories to meet rising domestic demand. According to the Ministry of Agriculture, drinking milk output reached 6.1 million tons (+5% YoY), cheese 841,000 tons (+5.1% YoY), cottage cheese 474,500 tons (+5% YoY), ice cream 600,000 tons (+16.6% YoY), cream 362,000 tons (+14.7% YoY), and yogurt 791,000 tons (+6.6% YoY). Fermented dairy products, excluding cottage cheese, grew by 3.2% to over 2.7 million tons. The sector benefits from an expanding raw milk base and major investment projects, with raw milk production increasing to 34.07 million tons (+0.8% YoY). Government support for dairy rose from approximately USD 690 million in 2023 to nearly USD 900 million in 2024. Despite challenges, demand outpaces production, driven by rising real incomes, with industry efforts focusing on expanding raw milk supply.

Ukraine

Fresh Dairy Imports to Ukraine Surge in January 2025

In Jan-25, Ukraine's imports of fresh dairy products increased by 55% compared to the same period last year, with Polish dairy accounting for 60% of the volume. The fresh dairy market in Feb-25 has started to show signs of recovery, but sales growth remains slow, with no significant positive momentum observed. Prices are now stabilizing, but experts suggest reducing prices, especially for sour cream and cottage cheese, to stimulate sales. Domestic producers are concerned about the growing import of fresh dairy products. Additionally, Ukrainian exports of dairy products have benefited from higher global prices.

Ukraine's Growing Dairy Exports with Poland as a Key Market

Ukraine's State Customs Service data confirms a steady increase in dairy exports, with condensed milk exports primarily directed to Poland. In 2024, Ukraine exported 26,600 tons of non-condensed milk and cream, a 6% decline YoY, but revenue grew 6% to USD 17.6 million. Moldova (92.5%), Armenia (3.3%), and Georgia (1.8%) were the top buyers. Meanwhile, condensed milk and cream exports surged 6.5% to 29,500 tons, generating 8.2% more revenue at USD 74.3 million. Poland led as the top importer (21.8%), followed by Bulgaria (17.7%) and Israel (8.6%).

Bluetongue Virus Approaching Ukraine's Borders from Poland

First detected in Poland in Nov-24, the bluetongue virus (BTV3) has caused ten outbreaks primarily in the western and northern regions. Although the disease's impact is considered minor, it is gradually approaching Ukraine's borders, with a high-risk area spanning nearly half of Poland due to quarantine zones. The virus does not ban the export of milk from infected cows but affects milk supply through reduced yields and quarantining of animals. While Poland has restricted livestock movement within high-risk zones, movement outside these areas may still be allowed with specific veterinary permits. The main risk of the virus spreading to Ukraine is via its western border with Poland.

2. Weekly Pricing

Weekly Powdered Milk Pricing Important Exporters (USD/kg)

Yearly Change in Powdered Milk Pricing Important Exporters (W7 2024 to W7 2025)

Germany

Germany's milk prices have seen significant increases in recent months, with W7 prices reaching USD 4.64 per kilogram (kg), marking a 28.18% week-on-week (WoW) rise, a 2.88% month-on-month (MoM) increase and a 12.62% YoY increase. This surge is driven by tight supply conditions, including a 3.3% decline in the dairy cow population, adverse weather, and disruptions from FMD and African Swine Fever (ASF). Despite the lifting of FMD-related restrictions in Jan-25, which has helped stabilize the market, supply remains constrained across Europe, pushing prices higher. Looking ahead, milk prices are expected to stay elevated in the short term, with weather conditions and the potential lifting of export restrictions playing a key role in shaping future price trends.

Belgium

Belgium's milk prices declined to USD 3.69/kg in W7, a decrease of 0.27% WoW, 1.86% MoM, and 25.15% YoY. These drops reflect a correction after the price surge in late 2024, which was caused by supply constraints. The decrease is primarily due to weakened demand, coupled with a seasonal increase in milk supply as cooler temperatures boost cow production. Additionally, the market is adjusting after the impact of high input costs and previous supply chain disruptions. With production conditions returning to normal and input costs stabilizing, prices are aligning more closely with typical seasonal patterns, leading to this downward trend. Moving forward, prices are likely to remain stable but could continue to fluctuate in line with supply-demand dynamics and seasonal factors.

Netherlands

In W7 of 2025, the price of milk in the Netherlands was recorded at USD 2.18/kg showing a slight increase of 0.46% compared to the previous week. While the MoM change showed a significant drop of 40.27%, this can largely be attributed to an abnormal price spike in W4, which led to prices returning to more normalized levels. As a result, prices are stabilizing and aligning more closely with the levels observed earlier in the year. YoY prices are slightly higher by 3.81%, reflecting tighter milk supplies in the Netherlands and across Europe, which have supported higher price levels despite recent market fluctuations.

France

In W7, the price of milk in France reached USD 2.99/kg, showing a slight increase of 1.36% compared to the previous week. The MoM increase of 2.05% also reflects the overall upward trend driven by tighter milk supply across Europe, which has been fueling higher demand and putting upward pressure on prices. However, YoY prices have dropped by 3.86%, primarily as a result of an expansion in France’s milk production throughout 2024. As supply levels rise, this trend is expected to continue, with prices likely to experience further declines in the coming months as the increased production starts to stabilize the market.

Poland

In W7, milk prices in Poland reached USD 3.38/kg, reflecting a significant 20.28% increase compared to the previous week, a 4.64% MoM increase and a 20.71% YoY increase driven by a combination of factors. The primary contributors to these price hikes include supply constraints caused by unfavorable weather conditions, as well as disruptions from FMD and ASF outbreaks, which have tightened milk supply across Europe. Additionally, challenges such as the implementation of sustainability regulations under the EU Green Deal, rising production costs, and ongoing geopolitical issues are further complicating the situation. While milk supply is expected to rise by 30% this season, potentially alleviating some of the tightness, prices remain volatile. As production levels increase throughout the season, we can anticipate a gradual price decline, although short-term fluctuations are likely.

3. Actionable Recommendations

Diversify Export Markets Amid Geopolitical Risks

With global dairy demand showing uneven growth, especially in emerging markets, producers should actively diversify their export markets to mitigate risks from fluctuating demand and geopolitical tensions. Belarus’ expansion into Pakistan serves as an example of how leveraging new markets can provide a cushion against regional supply issues. For European exporters, focusing on Middle Eastern and Southeast Asian markets, which show consistent demand, could reduce dependency on traditional markets like China, which has experienced stagnation in milk powder imports.

Enhance Price Competitiveness in Challenged Markets

In markets such as Ukraine, where the fresh dairy sector is facing growth in imports from neighboring countries like Poland, it is critical to focus on price competitiveness and improving product quality. With Ukrainian dairy prices stabilizing, there is an opportunity to address the price sensitivity of consumers by offering value-oriented options, such as lower-cost dairy products or bulk pricing models. Additionally, collaborating with local producers could help alleviate some supply concerns and foster a more resilient market position.

Leverage Technological Innovation to Boost Production Efficiency

Technological advancements in dairy farming, such as automated milking systems, precision agriculture, and improved feed technologies, can help mitigate the impact of rising production costs. Investments in such technologies should be prioritized across key markets, particularly in countries like the US, Russia, and Belarus, where increasing milk production is essential to meet growing domestic demand. These innovations will enable producers to maintain competitiveness even as feed costs and labor prices rise.

Sources: Tridge, Agro Polit, Agro Portal UA, Agro Times UA, Farmer PL, Milk News, Portal do Agronegocio, UKR Consult, Veeteelt