The weighted EU average farmgate milk price decreased in July 2015 by 0.9% to 29.7c/kg, which is 20% lower than in July 2014 and 12% lower than the average of the last 5 years. According to Member States’ estimates, the average milk price in August 2015 would have decreased to 29.3 c/kg.
Prices on spot milk markets have shown different trends in last month. In Italy, the spot milk price decreased between weeks 32 and 38 by 4% (from 36.0 to 34.5 c/kg) and is now 6% below last year. In the Netherlands, the spot milk price increased between weeks 33 and 39 by 14% (from 22.0 to 26.3c/kg), meaning a 18% decrease compared to last year's level.
EU average dairy product prices generally improved last month, with the only exception of cheddar, gouda and edam cheeses. Powders registered the bigger increases (+5.2% for WMP, +4.8% for wheypowder, +2.9% for SMP), followed by butter (+1.1%) and emmental cheese (+0.5%).
On the world market, prices expressed in US$ have generally increased in the last fortnight. Biggest price raises were observed in Oceania, in line with last Global Dairy trade results, notably for WMP (+14%). In the US, butter and cheese prices remain at high levels thanks to the strong domestic demand, although the latter has fallen by 1.5%. EU quotations reflect the upward trend observed in the last weeks, slightly accentuated by the competitive euro/dollar exchange rate. Oceania is the most competitive region for the four dairy commodities, and the US the most expensive.
EU exports in the first 7 months of 2015 improved for SMP, butter/butteroil, condensed milk, caseines and whey powder. Negative figures are observed for WMP and cheese.
The EU has increased cheese exports to all destinations other than Russia and Lybia. Up to July 2015, the US is by far the main outlet of EU cheese exports with a 21% increase compared to last year, followed by Japan (+55%). Switzerland, Saudi Arabia and South Korea accompany these two countries in the ranking of the main destinations for EU cheese exports. Saudi Arabia, the US and Egypt are still the main destinations for EU butter in the period January-July, showing a notable increase in the three cases compared to last year. Algeria leads the ranking for EU SMP exports although compared to 2014 the volumes have decreased by 31%. Egypt is the second outlet for EU SMP in the first seven months of the year (with a 66% increase over last year) while China has climbed to the third position despite the 25% reduction in imports from the EU. Regarding EU WMP, cumulated Jan-Jul 2015 export destinations remain very similar to last year, with Oman in first position (+29% by July) followed by Algeria and Nigeria.
NZ increased its exports in the first 7 months of 2015 by 13% for SMP and 20% for cheese, while butter and WMP volumes fell by 10% and 5% respectively. High domestic demand and prices keep down US exports of dairy products in 2015. Cheese and SMP – the main exported commodities in the US – are decreasing by 13% and 8% respectively. Butter and WMP are falling in a higher percentage (-72% and -34%) but the volumes are much lower.
On the demand side, the deceleration in imports from China has moderated in July for butter and SMP, and even a cumulated Jan-Jul increase (+5%) is reported for cheese. US, Mexico and Egypt have shown a remarkable increase in butter imports (+183%, +82% and +69% respectively). Japan, the US and South Korea lead the ranking of cheese importers in 2015, with increased volumes compared to last year, while Russia is the third cheese importer but has cut its imports by 54%.
NZ milk production increased by 14% in July 2015 compared to the same month in 2014. In the complete 2015-16 season (June 2015 to May 2016), milk production has been 11.5% over 2014-15 levels. Milk prices decreased in July 2015 by 20% (24.9 to 19.8 c/kg) meaning a 35% decrease in one year.
Australian milk production in July 2015, first month of the 2015-16 season, increased by 7.6% compared to July 2014.
Milk production in the US increased by 0.8% in July 2015, meaning a cumulated increase of 1.5% in the year. In September the USDA has raised slightly the 2015 milk supply projection to +1.4%. For June 2015, the US milk price is reported at 37.1 c/kg (-0.2% compared to June, 6% lower than last year).
