A slowdown in the trade of skimmed milk powder and reduced demand for cheese in the EU and the US led to a slight decrease in the price index, but the existing demand for butter prevented a more significant drop, reports Georgii Kukhaleyshvili, an analyst at the Association of Milk Producers of Ukraine.
On Tuesday, February 18, the 374th GDT auction took place, resulting in a price index of 1257, a decrease of 7 points (-0.6%) from the previous auction on February 4. The average price of dairy products was $4370 per ton, $74 higher than the previous auction's results. During the auction, 22,651 tons of exchange commodities were sold, 1,203 tons less than the previous auction. The minimum offer was recorded at 21,256 tons, and the maximum at 26,020 tons. The auction saw participation from 165 dairy market operators, 17 fewer than on February 4.
The price of anhydrous milk fat was $6,723 per ton, down 0.8% from the previous auction. Last week, prices for milk fat increased in Europe, but the global market situation for anhydrous milk fat remains uncertain. According to Dairy News Today, Mexico imports this product from New Zealand for further re-export to the US, but doubts arose at the end of 2024 regarding further supplies to America due to President Donald Trump's announcement of a 25% tariff on imports from Mexico and Canada. Agreements were reached to delay the tariffs for 30 days in exchange for increased border security by Mexico and Canada, but the potential loss of access to the American market may restrain demand for the product. Mexico buys about 10% of New Zealand's anhydrous milk fat. Auction organizers forecast a 1.7% decrease in the price of anhydrous milk fat in March and a 0.7% decrease in April.
The price of butter at this auction was $7,378 per ton, up 2.2% compared to the previous auction results. According to USDA, butter production is increasing in Europe and is actively sold in large wholesale lots. Some price reduction on European butter contributed to renewed interest in the product from buyers during the preparation period for Ramadan in Muslim countries. New Zealand butter prices are rising amid seasonal milk production declines in Oceania. Butter demand is active in this region. According to GDT organizers, butter may increase in price by 1.4% in March and 2.2% in April.
The price of whole milk powder was $4,153 per ton, a decrease of 0.2% compared to the previous auction results. According to USDA, milk supply stabilized in South America, and Brazilian buyers hope for price reductions. Demand for whole milk powder is stable in the US and Europe. German product is returning to the market as no new cases of foot-and-mouth disease have been recorded. However, whole milk powder production is not very active as a significant portion of raw milk for processing is used by European companies in cheese production. Due to the decline in import demand for whole milk powder in China, European companies can reduce production and exports of the product and channel raw milk into butter, cheese, and other product production. Whole milk powder is in demand in Oceania, and product prices are rising amid seasonal milk production declines..
Demand for New Zealand whole milk powder has increased worldwide over recent weeks, likely due to preparation for Ramadan in MENA countries. This likely helped to prevent greater price falls. February-May will see deliveries of whole milk powder to Algeria from Belarusian and Polish dairy processing plants following ONIL procurement tenders. According to China's National Bureau of Statistics, whole milk powder imports into the country decreased by 5% in 2024, despite increased deliveries in December. According to Rabobank, some import demand for dairy products may increase amid milk production slowdown in the Chinese market by 0.1% over three quarters of 2024. According to AHDB, milk production growth in China is slowing due to lower procurement prices, the negative impact of drought in the third quarter, and local dairy farmers exiting the industry. Rabobank estimates that in 2025, China's milk production may decrease by 1.5%, potentially increasing dairy product imports by 2%. Auction organizers expect a 2.3% decrease in whole milk powder prices in March but forecast a 0.1% increase in April.
The price of skimmed milk powder fell to $2,754 per ton, a decrease of 2.5% from the previous session's results. According to USDA, prices for skimmed milk powder decreased in Europe, and German product returned to the market as no new cases of foot-and-mouth disease were recorded in cows. Despite some increase in skimmed milk powder production, most raw milk is used in cheese production. Demand for American skimmed milk powder is moderate. Mexican buyers are meeting current product needs. Increased deliveries of skimmed milk powder to Mexico are expected as prices ease.
Production of skimmed milk powder is decreasing in Oceania amid seasonal raw milk production declines. Demand for skimmed milk powder exists in export markets. In November, Algerian importers ONIL and Soummam announced tenders for the supply of skimmed milk powder at the end of the first and beginning of the second quarters of 2025. Amid modest milk production volumes in South America, local cheesemakers are adding skimmed milk powder to their products and supplying Brazil and African countries. Auction organizers expect skimmed milk powder prices to decrease by 2.4% in March and 2.6% in April.
Cheddar cheese prices fell to $4,862 per ton (-3.4%), while mozzarella cheese prices decreased to $4,148 per ton (-0.1%). According to USDA, demand for cheese from the food industry in the EU was lower than the same period last year. In the US, demand for cheese is mostly stable. Cheese demand remains active in Oceania. Over recent weeks, there has been strong demand for New Zealand cheeses in foreign markets. Auction organizers predict that Cheddar cheese may decrease by 1.4% in March and 4.3% in April. A 0.4% increase in mozzarella cheese prices is forecasted for April.
Lactose prices fell to $1,015 per ton (-3.4%). According to USDA, American producers report stable lactose production schedules and growing domestic demand. Spot batches are available, but stocks are mixed. Market participants report that contracts for the second quarter are already actively being concluded. Export activity remains stable. Auction organizers forecast a 3.4% price decrease in April.
No results were published for dry buttermilk. According to USDA, dry buttermilk production volumes in the US are slowly increasing, and the product supply is limited for spot market buyers.
The next GDT auction will be held on March 4.
Press Service of the Association of Milk Producers
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