In Germany, milk deliveries increased only marginally (+0.1%) in the first 4 months of 2024. According to the latest cattle census from May 24, cow numbers fell by 106,900 animals or 2.8% compared to the previous year. Rising milk yields per cow are compensating for the time being.
Delivery volumes in the Netherlands are already showing a clear downward trend at -1.2%. Ireland even lost just under -8% due to a shortage of feed. For the EU as a whole, however, there was a slight increase in milk production of +0.5% in the period under review. However, the seasonal peak in milk supply has been passed.
Domestic demand varies depending on the product. Demand for packet butter is encouragingly strong, while processed butter leaves much to be desired. Skimmed milk powder is also neglected. On the other hand, current cheese production is not always able to fully meet the rising demand.
Sales of milk mixes and sour milk drinks are rising in line with the season, but cream consumption is still below the previous year's level.
In the EU third country trade, exports of SMP fell by around 11% in the first quarter of 2024, mainly due to the decline in Chinese imports of around 80%; butter exports also fell by 4%.
Milk farm-gate prices show a comparatively stable trend for the current season, but vary depending on the region and company.
EEX butter prices have been trending downwards over the past week, due to subdued demand in the block butter sector, which has not been fully offset by brisk sales of packet feed.
EEX prices for skimmed milk powder remain on a downward trend. The background to this is the weak third-country business, which is coming under further price pressure as a result of the latest GDT auction results.
GDT auction results on Tuesday, July 2nd showed an average price drop of -6.9%, but a 45% increase in volume. Butter products suffered particularly heavy price falls of over -10%. The reasons for this are the Chinese reluctance to bid prices and the expected increase in supply in the coming months. The new milk season in Oceania is about to start again and usually peaks in Oct. 2024.
The current IFE Exchange Milk Value shows a barely stable development for the remaining months of the year, albeit at a comparatively high level of between 47 and 48 ct/kg.
ZMP Live Expert Opinion
Compared to previous seasonal developments, the milk market is relatively stable. A slowdown in milk deliveries is causing partial shortages in the fresh produce, packet butter and cheese sectors. The further outlook promises a largely stable development for the time being. However, the price declines at the most recent GDT auction are cause for concern.
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