Milk Market Observatory
Last update: 31.05.2017
Milk Market Situation
May 2017
o EU cow's milk collection decreased by 0.4% in March
2017 compared to the same month last year. Total milk
deliveries in the first 3 months of 2017 have been 2.3%
lower than in the same period in 2016 (no leap day
correction). A decrease in EU dairy production has been
reported in Q1 2017 (January-March) for SMP (-9.0%),
butter (-4.0%), drinking milk (-2.8%) and concentrated
milk (-0.5%), while there were 1.7% more cheese, +1.0%
cream, +0.6% fermented milk and +0.4% WMP.
o The weighted EU average farm gate milk price
decreased in March 2017 by 0.8% to 33.11 c/kg, for a
total 29% increase since July 2016. This price is 17%
higher than in March 2016 and in line with the average of
the last 5 years. Estimates for April point to a slight
decrease (-0.3%) to 33.0 c/kg.
o Prices on spot milk markets have increased in the last
weeks. In Italy, the spot milk price increased between
weeks 17 and 21 of 2017 by 11% (from 33.8 to 37.5 c/kg)
meaning a 45% increase compared to last year's level. In
the Netherlands the spot milk price increased between
weeks 17 and 21 by 24% (from 31.0 to 38.5 c/kg), this
price is 83% higher than in the same week of 2016.
o EU
average prices of dairy products generally
increased in the last month except of gouda (-0.3%).
Butter/butteroil (+9.4%), WMP (+6.2%), wheypowder
(+5.6%) SMP (+5.3%), emmental (+4.9%), cheddar
(+2.2%) and edam (+0.8%) prices went up.
o On the world market, prices expressed in US$ trended
appreciably in Australia, while decreased significantly in
Saudi Arabia (-51%) and Egypt (-80%).
o Algeria is leading the ranking for EU SMP (+22%) exports
in the first 3 months of 2017. The second destination for
EU SMP is China (+23%), followed by Indonesia (+5%),
but Mexico is showing a three-digit percentage increase in
EU SMP imports. EU WMP exports also increased
appreciably in the first destination in Algeria. Oman, China
and Kuwait are the other main markets.
o NZ exports decreased for all main products in the first 3
months of 2017: WMP (-2%), butter (-12%), cheese (13%) and SMP (-19%). The US improved the exports of
their two main traded commodities: SMP increased by 19%
and cheese by 12%. On the contrary, US butter and WMP
exports were well below last year (-46% and -3%
respectively), but volumes were much lower.
o On the demand side, China is still the main world dairy
importer of milk powders, butter and whey. China has
improved its import figures in the first 3 months of 2017
compared to 2016 for cheese (+17%), SMP (+3%) and
whey (+11%), but still cumulates some decreases for
butter (-15%) and WMP (-4%). By March 2017 Australia
and Canada have shown rises in butter imports (+60%
and +20% respectively), while the US decreased their
butter imports (-31%). Japan and the US (with 66% EU
origin) lead the ranking of cheese importers by March
2017, with decreased volumes compared to last year,
followed by Russia and South-Korea (+25%).
upwards in the last 2 weeks, except of Oceania butter (2.0%) and SMP (-1.2%) and US WMP (-6.8%). Due to a
significant evolution of the € against US$, US commodities
were more competitive: butter is cheaper in the US than in
the EU and Oceania for the first time since two years.
Oceania is still the most expensive region for butter, SMP
and WMP, and the EU for cheddar.
o NZ milk production increased by 6.3% in April 2017
o EU exports in the first 3 month of 2017 have increased in
the 2016-17 season) decreased by 6.3% compared to April
2016. Cumulated milk production in the campaign (July
2016 to June 2017) is 8.0% lower than last year.
volume for WMP (+12.4%), cheeses (+9.2%), SMP
(+6.7%), condensed milk (+6.2%) and wheypowder
(+3.6%). On the contrary decrease have been observed
for butter (-14.6%) and butteroil (-50.8%). Total EU
exports in January-March 2017, expressed in milk
equivalent, would have been 2.1% above last year level,
the value of these exports has increased by 16.5%.
o The EU has increased cheese exports to all top 10
destinations in the first 3 months of 2017, except to Saudi
Arabia (-18%) in the first 3 month of 2017. The US was by
far the main outlet for EU cheese (+1%), followed by
Japan (+43%) and South-Korea (+29%). Chile is showing
a three-digit percentage increased in EU cheese imports
(mainly from DE and NL).
o The US, Saudi Arabia and China have been the main
destinations for EU butter in the period January-March
2017, with a double digit increase for US (+50%) and
China (+14%). EU butter exports also increased
compared to the same month in 2016. In the 2016-17
season (June 2016 to May 2017) so far, milk production
has been 1.1% below 2015-16 levels. Milk price expressed
in c/kg decreased in March 2017 by 3.4% to 32.4 c/kg,
meaning a 60% increase compared to March 2016.
o Australian milk production in April 2017 (tenth month of
o Milk production in the US increased by 2.0% in April 2017,
meaning a cumulated increase of 1.3% in 2017. For March
2017, the US milk price was reported at 37.2 c/kg (-6.5%
compared to February 2017). This price is 18% higher
than in march 2016).