Milk News, 22.05.2025

Milk deliveries in Germany fell slightly at the beginning of May, interrupting the usual seasonal upward trend for the time being. According to the Central Milk Market Reporting (ZMB), 0.7% less milk was delivered in the 19th calendar week than in the previous week. At the turn of the month, the difference to the previous year's level had narrowed to just 0.2%, but it has now returned to 1.5%. This development is partly due to an opposite trend in the previous year. Prices for raw milk on the spot market were mixed: while the average price across Germany rose slightly by 0.5 cents to 41.40 cents per kilo in calendar week 20 according to the ife Institute, spot prices in the Netherlands fell by an average of 2 cents. In northern Italy, on the other hand, there was a further increase in raw milk prices in the first half of May.

The cheese market in Germany remained robust from mid-May. Retailers placed regular orders and the industry fulfilled its contractual obligations. Demand was also reported in the bulk consumer sector, with manufacturers anticipating further demand as temperatures rise and more people visit beer gardens. The export business has recently been within the expected seasonal framework, with sunny weather and the upcoming vacation season promising additional impetus. We also continued to receive inquiries from third countries. Thanks to the high milk deliveries during the peak of the season, cheese production was recently able to take place on a large scale. In the short term, however, milk volumes and their ingredients are expected to decline, which, according to market participants, is likely to lead to a more rapid supply shortage. Despite rising milk volumes, it was hardly possible to build up stocks. Ripening stocks have been low for weeks and the goods in storage were predominantly young. Against this backdrop, producers are demanding higher prices in the upcoming price negotiations. The quotation commission in Hanover kept the price for bread unchanged from the previous week, so that the range in calendar week 21 remained at EUR 4.80 to 5.00/kg. The price for block goods was reduced by an average of 5 cents on May 21, resulting in a range of 4.45 to 4.65 EUR/kg.

In the second half of May, market players believe that demand for packaged butter will remain brisk. Sales figures remain at a typically high seasonal level. For the coming week, those involved are expecting an additional upturn in demand due to the public holiday and the current asparagus season, although this has not yet materialized to the extent expected. In mid-May, the market for block butter was again divided: While demand for long-term deliveries remained quiet, interest in short-term deliveries increased significantly. According to national sales figures, sales were up on both the previous week and the same week last year. Thanks to the high milk supply in the peak milk period, the strong demand could still be met, which led to higher prices for block butter. In contrast, butter prices fell at the GlobalDairyTrade tender in New Zealand on May 20. Butter was sold there at an average price of the equivalent of EUR 6,944 per tonne, which continues to make European goods less competitive on the global market. On the European Energy Exchange (EEX) in Leipzig, block butter futures for the delivery periods from May 2025 to January 2026 were firmer again. In the 20th calendar week, prices rose by an average of EUR 113 to EUR 7,292 per tonne. Expectations for May to December 2025 were within the spot market range, while those for January 2026 were below it. Although trading volumes were down on the previous week, futures market activity remained lively: a total of 2,095 tons (419 contracts) were traded, which is 1,355 tons (271 contracts) less than in the previous week.

The market for food-grade skimmed milk powder gained momentum in mid-May. Demand was still high in the short term, resulting in a significant increase in new business. There was also increased purchasing for later delivery dates and more contracts were concluded than before. At the beginning of the second half of May, however, activity slowed down again somewhat, partly due to the slight appreciation of the euro against the US dollar in export business with third countries. Disagreement over the supply situation in the fall continued to ensure that price negotiations often remained without result. If the current drought continues, raw materials could again be in short supply in the fall. Prices have stabilized further, which is reflected in the quotation: On May 21, the Butter and Cheese Exchange in Kempten set the price range for skimmed milk powder at EUR 2,350 to EUR 2,470 per tonne, with the upper end being raised by EUR 20. On the European Energy Exchange (EEX) in Leipzig, however, prices for skimmed milk powder were predominantly weaker. In the 20th calendar week, the average price for deliveries from May 2025 to January 2026 fell to EUR 2,522 per tonne, a decrease of EUR 26 compared to the previous week. The price forecasts for May and June 2025 were within the range of the Kempten quotation, while expectations for the months of July to January were higher. The trading volume declined noticeably: 1,535 tons (307 contracts) were traded, which is 1,435 tons (287 contracts) less than in the previous week. On the GlobalDairyTrade tender in New Zealand, prices continued to fluctuate: on May 20, the index fell by 0.7% after rising at the beginning of the month. The average price across all delivery periods was the equivalent of EUR 2,501 per tonne.