Learn how the recent spike in European milk output affects dairy farmers. What can you do to stay ahead in this changing market? Find out more.
Summary: European milk production surged in June, marking the fifth straight month of growth. Despite strong performances in France, Poland, and Italy, declines in the Netherlands and Ireland balanced these gains. Globally, major dairy exporters saw an overall drop for the 11th consecutive month due to setbacks in Argentina, the U.S., and New Zealand. June’s output hit 12.7 million metric tons or 28 billion pounds, the highest year-on-year growth since May 2023. Germany maintained steady production, while France saw a 2.9% rise. Poland and Italy grew, but the Netherlands and Ireland faltered. High temperatures and an outbreak of blue tongue disease have recently stifled Western European production. These issues and a tight U.S. milk supply have driven dairy product prices up. For businesses, this means adjusting to potentially lower global milk prices, which could reduce feed costs and milk prices. Higher output could open up new collaborations and markets, with increased demand in Asia and the Middle East.
Europe’s milk output rose for the fifth month, hitting 12.7 million metric tons in June.
France, Poland, and Italy saw significant gains, while Germany’s production remained steady.
Declines in the Netherlands and Ireland tempered these gains.
Global dairy exporters faced an 11th consecutive month of overall production drop despite European growth.
High temperatures and blue tongue disease have recently impacted Western Europe’s milk production.
U.S. dairy markets experienced increased prices due to tight milk supply and European solid performance.
Dairy farmers must adjust strategies for future price fluctuations and global supply issues.
Milk production is surprisingly increasing throughout Europe, breaking traditional seasonal tendencies. But what does this imply for your farm and the more significant dairy industry? Despite a wet spring, the EU saw a substantial rise in milk production in June. Changing weather, disease outbreaks, and evolving market dynamics all impact milk production. The USDA’s Dairy Market News notes that “hot weather in France, Germany, and the Netherlands has stifled milk production and component levels.” Additionally, blue tongue illness influences the Western European milk supply. Despite a constrained milk supply, the US dairy market is growing, and there is a balance between European growth and setbacks in other key dairy exporters, such as Argentina and the United States. Understanding these trends is critical for any dairy farmer who wants to remain ahead of the curve. Ready to delve further into this developing story? Let’s get started.
June’s Record-Breaking Numbers
In June, European milk collections totaled approximately 12.7 million metric tons or roughly 28 billion pounds. That is a 0.9% gain over the previous year, the most substantial year-on-year growth since May 2023. This spike comes after a slow spring, marking a significant milestone for the EU-27 dairy industry.
Country
June 2023 (Metric Tons)
June 2024 (Metric Tons)
Change (%)
Germany
3,100,000
3,100,000
0.0%
France
2,650,000
2,725,850
2.9%
Poland
1,100,000
1,115,000
1.4%
Italy
950,000
980,000
3.2%
Netherlands
1,670,000
1,655,300
-0.9%
Ireland
1,230,000
1,215,000
-1.2%
Others
2,900,000
2,910,000
0.3%
Country-Specific Insights
Germany, the world’s largest milk producer, kept production consistent with the previous year. Meanwhile, France, the second-largest manufacturer, had a significant 2.9% rise. Poland and Italy also recorded substantial growth, offsetting falls in the Netherlands and Ireland. These country-specific patterns are critical to understanding the overall market dynamics.
Strategic Insights for Adapting to European Milk Output Changes
Have you considered how the increase in European milk production may affect your day-to-day operations? The rise presents possibilities and problems you cannot afford to ignore.
An increase in European output may put downward pressure on global milk prices. While this may imply reduced feed and input costs for your business, it may also lower milk prices. Keeping an eye on market developments will be essential.
The increase in output may open the path for new collaborations and international markets. Look beyond your boundaries; high-quality dairy products are becoming more popular in Asia and the Middle East. So, what will be your strategy? Adapt, innovate, and grasp opportunities while facing difficulties front-on.
While Europe saw growth, other major dairy exporters encountered difficulty. Argentina and the United States had considerable setbacks, while New Zealand saw a modest year-over-year decline. The five top dairy exporters fell 0.1% from last year’s output, marking the 11th straight monthly fall. This global perspective is vital for understanding the larger picture.
Weather and Disease: The Double Whammy
Since June, increasing temperatures have caused a decline in milk production on both sides of the Atlantic. According to the USDA’s Dairy Market News, hot weather in France, Germany, and the Netherlands has reduced milk output and component levels. An epidemic of blue tongue disease has also affected productivity in Western Europe. These causes are reducing dairy product inventories and raising prices.
The Bottom Line
So, what are the takeaways from all of this? The increase in European milk output and worldwide production constraints have resulted in a dynamic and potentially profitable market. Monitor weather patterns and disease outbreaks, which may immediately influence supply and pricing. Be aware and agile to capitalize on market trends. What tactics will you use to navigate these changes? It might be critical to your dairy farm’s survival.
How will 2024’s global skim milk powder trends impact your dairy farm? Are you ready for these changes and new opportunities?
The worldwide skim milk powder (SMP) industry is currently undergoing significant changes, influenced by various factors such as international trade dynamics, supply chain disruptions, and shifting dairy consumption trends. However, amidst these developments, the SMP industry presents a promising opportunity for substantial growth. Understanding these patterns is crucial for dairy producers, as SMP is a significant export commodity and a staple in home markets. This study will dissect the current state of the SMP industry, providing an overview of the main trends, opportunities, and challenges for 2024. Readers can expect a comprehensive understanding of how global market changes may impact their operations and decision-making processes, instilling a sense of optimism for the future.
Navigating Global SMP Market Diversification: A Closer Look at Key Players and Emerging Trends
The worldwide skim milk powder (SMP) industry is experiencing tremendous diversity and instability. Big players like the United States, New Zealand, and the European Union dominate the production landscape, with each area contributing significantly to the global supply chain. As of 2024, the United States alone is expected to generate an extra 1% of fluid milk, which may supplement its SMP supply. This gives American dairy producers an edge in fierce foreign competition.
However, Australia provides a different situation, with a predicted 1% rise in fluid milk output, indicating possible development in SMP exports. This favorable prognosis gives a light of optimism to market dynamics, notwithstanding the troubles encountered by other areas.
On the import front, rising Asian and Middle Eastern economies continue to have strong demand for SMP. This transition is driven by increased disposable incomes and shifting dietary choices favoring dairy-based goods. However, logistical challenges, particularly cross-border traffic congestion on important trade routes, offer substantial vulnerabilities and potentially disrupt supply chains if not managed correctly.
Modern market trends also show a rising customer preference for health-conscious goods, which has prompted producers to broaden their offers and concentrate on high-protein, low-fat dairy products. Sustainability practices are becoming more critical as customers and regulatory authorities strive for more environmentally friendly manufacturing processes, transforming global operating plans.
Understanding the Global Skim Milk Powder (SMP) Market in 2024: A Key to Navigating Dynamics, Challenges, and Opportunities
Trend
Impact on Dairy Farms
Additional Insights
11% growth in SMP output
Increased supply could pressure prices
Consider diversifying product offerings to manage market volatility
3% increase in exports
Opportunities for U.S. dairy farms to expand market reach
Focus on enhancing export quality standards to stay competitive
Decline in milk production
Potential strain on SMP production and supply chain
Adopt efficient farming practices to mitigate production challenges
Weakened demand from Asia
Reduced export revenue for SMP
Explore alternative markets to offset demand fluctuations
Regulatory changes
Impact on inter-state commerce and market accessibility
Stay updated with policy changes and adapt quickly
In 2024, the worldwide Skim Milk Powder (SMP) market is expected to undergo a dynamic transition driven by several crucial variables impacting supply and demand. Notably, the predicted 3% increase in butter output, driven by growing demand for high-fat dairy products, directly influences SMP supply. As more milk is directed toward butter and cheese production, the supply of SMP may tighten, putting upward pressure on pricing. However, the anticipated 1% rise in fluid milk output in the United States, which is expected to generate an extra 1% of fluid milk, may supplement its SMP supply, providing a marginal boost to milk available for powder manufacture. Understanding these characteristics is critical to making sound judgments in the SMP market.
Exports of SMP are expected to climb by 3% to 838,000 tonnes, demonstrating strong worldwide demand despite hurdles such as tariff uncertainty and changing trade policy. This predicted export expansion emphasizes the critical need to maintain competitive pricing and high-quality standards to gain and retain overseas markets.
Price predictions for dairy products in 2024 indicate a moderate 1 to 3 percent rise, putting SMP in a reasonably stable inflationary environment compared to other food categories. This steadiness, despite possible market turbulence, demonstrates the robustness of the SMP market. However, market volatility must be addressed, especially given legislative attempts to reduce greenhouse gas emissions and water consumption, which affect manufacturing costs. The formation of initiatives such as the Dairy Methane Action Alliance represents industry-wide efforts to align with global sustainability goals, which, while potentially increasing short-term expenses, aim to ensure long-term viability and market acceptance, providing reassurance about market stability.
By 2024, the SMP market will face supply challenges due to increased milk diversion to fat-based products and intense worldwide demand. Price stability, impacted by moderate inflation rates, changing regulatory environments, and intelligent international trade policies, will be critical in successfully navigating future market developments.
The Shifting Dynamics of the Global Skim Milk Powder (SMP) Market in 2024
The evolving dynamics of the worldwide Skim Milk Powder (SMP) market in 2024 will have significant consequences for the US dairy industry. These developments may be a double-edged sword, bringing possibilities and difficulties that need our full attention and deliberate response.
First, changes in export demand have a considerable impact. With nations like Australia dramatically increasing their cheese manufacturing capacity, competition in the global market heats up. This implies that we urgently need to improve our value proposition by enhancing product quality, broadening our offerings, and utilizing the “Made in the USA” brand to carve out a distinct niche. Understanding and aligning with global customer tastes may help us sustain a competitive advantage in the face of increasing competition.
The expected 1 to 3 percent rise in dairy product prices is a mixed bag. On the one hand, increasing pricing may boost profits, which is particularly important when operating expenses rise. However, price volatility remains a significant worry. Unpredictable pricing fluctuations strain our financial planning and jeopardize our long-term viability. This volatility could impact the SMP market, potentially leading to changes in demand and supply. Adopting solid financial strategies and hedging methods may reduce certain risks and provide a cushion against market swings.
Furthermore, when multinational companies increase output, there is a danger of market saturation. This could lead to increased competition and potentially lower prices in the SMP market. Identifying new markets and diversifying export destinations might assist in mitigating risk and minimizing reliance on old markets that may become oversupplied. Closer to home, there is a potential for innovation in our local market. Expanding value-added product lines, capitalizing on growing consumer preferences such as clean-label and high-protein alternatives, and improving supply chain efficiency all create significant domestic development opportunities.
Finally, empowering ourselves via invention and cooperation is both advantageous and essential. Forming cooperatives, investing in on-farm technology, and conducting joint research may all lead to on-farm solutions that improve productivity and sustainability. Staying current on global trends and being proactive rather than reactive will be critical in navigating these turbulent seas.
While the worldwide SMP market in 2024 will have unique difficulties, it will also provide opportunities for those willing to pivot wisely and exploit our capabilities. We must remain adaptable, knowledgeable, and unified to capitalize on these global trends.
Strategic Actions for Navigating a Transforming SMP Market: Preparing for the FutureAs dairy farmer managers looking to navigate the evolving SMP market, here are some practical strategies to keep your operations resilient and profitable:
Diversify Product Offerings: Taking Control of Your Market PresenceImprove Production Efficiency: Invest in technology and farming practices that enhance productivity. Precision farming tools, automated milking systems, and sustainable farming techniques can significantly reduce costs and improve yields. Furthermore, collaborating with initiatives like the Dairy Methane Action Alliance can help lower methane emissions and enhance environmental compliance.
Explore New Markets: Stay ahead of market trends by exploring emerging markets, particularly regions with growing demand for dairy products. Strengthen export strategies and establish partnerships with international distributors. For instance, Australia’s rising fluid milk production suggests opportunities for collaboration and exchange of best practices.
Focus on Workforce Development: Address labor challenges by investing in workforce training and development. Empower your team with knowledge about sustainable farming practices and new technologies. A well-trained workforce adaptable to market changes seamlessly integrates production and product diversity improvements.
Adopt Sustainable Practices: Embrace sustainability as a core operational principle. Implement measures to reduce your carbon footprint, such as optimizing feed efficiency or adopting renewable energy sources. Consumers and international markets increasingly favor sustainable products, which can provide a competitive edge.
By implementing these strategies, dairy farmers can better manage the uncertainties of the SMP market, ensuring long-term growth and sustainability for their operations.
The Bottom Line
The Skim Milk Powder (SMP) market will face opportunities and constraints in 2024. Dairy producers must be attentive and adaptive. We examined how expanding demand, sustainability, and shifting rules influence the market. Staying updated is not only beneficial; it is necessary for competitiveness and profitability.
Key insights include:
Making sustainability a primary goal.
Using modern technologies such as ERPs.
Analyzing labor market developments.
Regional production trends, export dynamics, and regulatory frameworks play essential roles. Those who adjust proactively will gain an advantage. The future is hopeful and challenging, with growth, nutrition, and innovation fueling industry confidence.
Stay involved, informed, and proactive. The future of dairy farming seems promising for those willing to develop. Let us use these ideas, embrace change, and drive the sector to higher sustainability and profitability.
Key Takeaways:
Divergent Trends: The SMP market is experiencing both growth and contraction in different regions, influenced by varying consumer preferences and economic conditions.
Economic Factors: Global economic uncertainties, such as inflation and currency fluctuations, are expected to impact SMP pricing and demand.
Technological Innovations: Advancements in dairy processing technologies are enhancing production efficiency and product quality, offering new opportunities for market players.
Regulatory Changes: Changing regulations and trade policies in major dairy-producing countries could significantly affect export-import dynamics.
Sustainability Focus: There is a growing emphasis on sustainable dairy farming practices, which could influence consumer buying behaviors and market demand.
Summary:
The global skim milk powder (SMP) industry is experiencing significant changes due to international trade dynamics, supply chain disruptions, and shifting dairy consumption trends. Key players like the United States, New Zealand, and the European Union dominate the production landscape, contributing significantly to the global supply chain. As of 2024, the United States is expected to generate an extra 1% of fluid milk, supplementing its SMP supply. Australia is predicted to develop SMP exports with a 1% rise in fluid milk output. Rising Asian and Middle Eastern economies have strong demand for SMP due to increased disposable incomes and shifting dietary choices. However, logistical challenges, particularly cross-border traffic congestion, offer vulnerabilities and potentially disrupt supply chains. Modern market trends show a rising customer preference for health-conscious goods, prompting producers to broaden their offerings and focus on high-protein, low-fat dairy products. Sustainability practices are becoming more critical as customers and regulatory authorities strive for more environmentally friendly manufacturing processes. By 2024, the SMP market will face supply challenges due to increased milk diversion to fat-based products and intense worldwide demand. Price stability, impacted by moderate inflation rates, changing regulatory environments, and intelligent international trade policies, will be critical in navigating future market developments.
Uncover the effects of reduced milk supplies and evolving export trends on dairy prices for 2024-2025. Are you ready to navigate the upcoming changes in the dairy market?
High angle view of most common dairy products shot on rustic wooden table. The composition includes milk, sour cream, butter, yogurt, eggs and cottage cheese. Predominant colors are white, yellow and brown. High resolution 42Mp studio digital capture taken with Sony A7rii and Sony FE 90mm f2.8 macro G OSS lens
The complexity of the dairy business, particularly in estimating milk output and price, is of utmost importance in 2024 and 2025. Slower milk per cow growth will influence supply, while local and foreign demand swings complicate the situation. The dairy business is at a crucial stage. Understanding these relationships is not just critical, but it also empowers stakeholders, ensuring they are well informed and prepared. Higher cow numbers, shifting commercial exports and imports, and price modifications for dairy products all contribute to the sector’s volatility. Anticipating market trends in the $1.1 trillion dairy sector helps business players manage problems and comprehend their impact on local economies and global food security.
As we navigate the complexities of the dairy market for 2024 and 2025, it’s essential to understand the interplay between milk production, export trends, and pricing dynamics. The data below provides an insightful overview of the projected changes and underlying factors.
Challenging Assumptions: Higher Cow Numbers Don’t Guarantee Increased Milk Production
Year
Previous Forecast (billion pounds)
Revised Forecast (billion pounds)
Change (%)
2024
227.5
225.8
-0.75%
2025
230.0
228.2
-0.78%
While more significant cow numbers may indicate improved milk output, updated predictions for 2024 and 2025 tell a different story. The key reason for these reduced estimates is slower milk increase per cow, which outweighs the benefits of a large cow inventory. Weather, feed quality, and genetic constraints all contribute to the slow rise in production. Adverse weather affects the quality of feed crops, which are critical for milk production, and genetic innovations face limits that prevent rapid productivity increases. Consequently, even with increased cow numbers, overall milk yield remains below expectations, necessitating a projection revision. It’s the responsibility of industry stakeholders to consider cow numbers and productivity to create accurate estimates and implement successful initiatives, fostering a proactive and responsible approach.
Unveiling the Dynamics of Commercial Dairy Exports: Navigating the Shifting Landscape for 2024 and 2025
Year
Commercial Exports (Fat Basis)
Commercial Exports (Skim-Solids Basis)
2024
Raised
Lowered
2025
Reduced
Reduced
Analyzing changes in commercial exports for 2024 and 2025 indicates a complicated dynamic caused by varied demand and production capacities across categories. Increased butter and cheese shipments in 2024 have boosted fat-based exports, indicating a solid foreign demand for higher-fat dairy products. In contrast, lower skim-solids base exports of nonfat dry milk (NDM) and lactose indicate a shift in the trade environment, which competitive price, nutritional demand adjustments, or trade policy changes might drive.
The forecast is more cautious until 2025. Fat-based and skim-solids-based exports are expected to drop. This might indicate rising internal use, pressure from global competitors, or severe rules limiting export potential. Navigating these obstacles while capitalizing on upcoming possibilities will be critical to the dairy industry’s balanced and sustainable development path.
The Shifting Tides of Dairy Imports: A Detailed Examination for 2024 and 2025
Year
Fat Basis Imports
Skim-Solids Basis Imports
2024
Raised
Lowered
2025
Unchanged
Reduced
In 2024, dairy imports on a fat basis are predicted to climb, owing to rising demand for butter and butterfat products. This tendency is likely due to changes in consumer tastes or industry demands. However, imports are expected to fall on a skim-solids basis, reflecting a demand or sourcing strategy shift. In 2025, fat-based imports are expected to stay stable. Still, skim-solids imports are expected to fall, potentially owing to increasing local production or decreasing demand for commodities such as nonfat dry milk and lactose. These import patterns indicate the market factors that affect the dairy industry.
Projected Price Elevations in Dairy Commodities: Implications for 2024 and 2025
Year
Cheese ($/lb)
Butter ($/lb)
NDM ($/lb)
Whey ($/lb)
Class III ($/cwt)
Class IV ($/cwt)
All Milk ($/cwt)
2024
2.10
2.50
1.45
0.60
20.50
19.75
22.25
2025
2.15
2.55
1.50
0.62
20.75
20.00
22.50
Recent steady pricing and tighter milk supply will drive higher dairy product prices in 2024 and 2025. Cheese, butter, nonfat dry milk (NDM), and whey prices are likely to rise compared to prior projections. Cheese prices are expected to climb dramatically by 2024, with butter following suit due to high demand and limited availability. NDM, a key ingredient in dairy products, is expected to rise in price, increasing whey pricing. The trend will continue until 2025, fueled by persistently restricted milk supply and high market prices. As a result, Class III and Class IV milk prices will rise, bringing the overall milk price prediction to $22.25 per cwt in 2024 and $22.50 per cwt in 2025. This increase highlights the influence of limited supply and strong demand on dairy prices, demonstrating the complexities of market dynamics.
Decoding the Surge: Understanding the Upward Forecasts for Class III and Class IV Milk Prices in 2024 and 2025
Year
Class III Milk Price ($/cwt)
Class IV Milk Price ($/cwt)
2024
19.85
18.00
2025
20.25
18.50
The increased predictions for Class III and Class IV milk prices in 2024 and 2025 are due to higher costs for essential dairy products such as cheese, butter, nonfat dry milk (NDM), and whey. Class III milk is used in cheese manufacturing, leading to higher pricing due to limited supply and high demand. Similarly, Class IV milk, which is used in butter and dry milk products, reflects growing market pricing for these commodities. Higher product prices directly impact milk price estimates since they are used in industry pricing calculations. With a tight milk supply, robust dairy product prices support these increases in Class III and IV milk price estimates.
All Milk Prices Poised for Significant Rise: Charting a New Trajectory for Dairy Market Stability
The higher adjustment of the milk price projection to $22.25 per cwt in 2024 and $22.50 per cwt in 2025 indicates a substantial change in dairy market dynamics. This gain is driven by tighter milk supply and strong demand for butter, cheese, NDM, and whey. It’s a testament to the sector’s resilience, reassuring stakeholders and instilling confidence in the face of production and export variations.
All Milk Prices Poised for Significant Rise: Charting a New Trajectory for Dairy Market Stability higher pricing per hundredweight (cwt) allows dairy farmers to increase profitability, balancing increased input costs such as feed, labor, and energy. This might increase agricultural infrastructure and technology investments, improving efficiency and sustainability. However, depending on long-term price rises exposes producers to market instability and economic risk. Unexpected milk supply increases, or demand declines might cause price adjustments, jeopardizing financial stability. Stakeholders need to be aware of these potential risks and plan accordingly.
For consumers, predicted price increases in dairy commodities may boost retail costs for milk and milk-based products, straining family budgets, particularly among low-income households. The extent to which merchants pass on cost increases determines the effect. In highly competitive marketplaces, price transmission may be mitigated. Due to price fluctuations, consumers may seek lower-cost alternatives or shift their purchasing habits.
Overall, the expected increase in total milk prices reflects a complicated combination of supply limits and high demand. Farmers and consumers must strategize and adapt to navigate the economic environment and maintain the dairy sector’s long-term existence.
The Bottom Line
The dairy market estimate for 2024 and 2025 demonstrates a complicated relationship between higher cow numbers and slower growth in milk per cow, influencing export and import patterns. Milk output is expected to fall owing to lower milk yield per cow. Commercial dairy exports will grow in 2024 on a fat basis but fall on a skim-solids basis, with an overall decrease in 2025. Fat-based imports will rise in 2024 and stay constant in 2025, while skim-solid imports will fall in both years. Higher prices for cheese, butter, nonfat dry milk (NDM), and whey suggest tighter milk supplies, rising Class III and IV milk prices and driving the all-milk price projection to $22.25 per cwt in 2024 and $22.50 per cwt in 2025. Monitoring supply and demand is crucial for industry stakeholders. To succeed in an ever-changing market, they must be watchful, innovate, and embrace sustainable practices.
Key Takeaways:
The milk production forecast for 2024 is reduced due to slower growth in milk per cow, despite an increase in cow numbers.
Similarly, the 2025 milk production forecast is lowered as slower growth in milk per cow overshadows a larger cow inventory.
For 2024, commercial exports on a fat basis are raised, primarily driven by increased butter and cheese shipments, while skim-solids basis exports are lowered due to reduced nonfat dry milk (NDM) and lactose exports.
In 2025, commercial exports are expected to decrease on both fat and skim-solids bases.
Fat basis imports for 2024 are projected to rise, reflecting higher anticipated imports of butter and butterfat products, whereas skim-solids basis imports are lowered for a number of products.
For 2025, imports remain unchanged on a fat basis but are reduced on a skim-solids basis.
The prices of cheese, butter, NDM, and whey for 2024 are raised from previous forecasts due to recent price strengths and expectations of tighter milk supplies.
Higher dairy product prices elevate the Class III and Class IV price forecasts for 2024, with the all milk price forecast increased to $22.25 per cwt.
These stronger price trends are expected to continue into 2025, further raising projected prices for butter, cheese, NDM, and whey, along with Class III and Class IV milk prices, and an all milk price forecast of $22.50 per cwt.
Summary:
The dairy industry faces challenges in 2024 and 2025 due to slower milk per cow growth, affecting supply and demand swings. Factors like weather, feed quality, and genetic constraints contribute to the slow rise in production, outweighing the benefits of a large cow inventory. Despite increased cow numbers, overall milk yield remains below expectations, necessitating a projection revision. Commercial dairy exports for 2024 and 2025 show a complicated dynamic due to varied demand and production capacities across categories. Increased butter and cheese shipments in 2024 have boosted fat-based exports, indicating solid foreign demand for higher-fat dairy products. However, lower skim-solids base exports of nonfat dry milk and lactose indicate a shift in the trade environment, possibly driven by competitive price, nutritional demand adjustments, or trade policy changes. The forecast is more cautious until 2025, with fat-based and skim-solids-based exports expected to drop. Price elevations in dairy commodities are likely to rise compared to prior projections, with cheese prices climbing dramatically by 2024.
Uncover USDA’s 2024-25 forecast: stable milk output, higher dairy prices, and beef trends. How will these affect your business and market plans?
Comprising important elements such as milk production, dairy pricing, and changing patterns, the USDA’s thorough prediction for 2024–25 presents a full picture of the dairy industry. This projection—a great tool for market analysts—has great relevance for farmers, manufacturers, and other stakeholders driving their strategic decisions.
Stable Milk Output Projections Set the Stage for Increased Exports and Rising Prices
Category
2023
2024
2025
Total Milk Production (billion pounds)
226.4
227.3
229.3
Class III Milk Price ($/cwt)
—
17.90
17.70
Class IV Milk Price ($/cwt)
—
20.50
20.10
All-Milk Price ($/cwt)
—
21.60
21.50
Since last month, the milk production forecasts for 2024 and 2025 have been constant, suggesting a harmonic approach to cow inventory levels. This consistency and the expectation of higher cheese shipments have resulted in an upward estimate for commercial exports on a fat basis for 2024 while skim-solids-based exports stay the same.
The forecasts of solid worldwide demand provide a picture of the global dairy industry and drive the increasing export projections for fat and skim-solids bases. Farmers, producers, and other interested parties, including manufacturers, depend on this realization as they make plans for 2025. Driven by planned imports of butter and milk protein-containing products, import forecasts for 2024 are also on the rise; similarly, projections for 2025 show the same increases.
The recent price increases’ positive trend has helped raise the price estimates for butter, cheese, whey, and nonfat dry milk (NDM) for 2024. Milk prices in Class III and Class IV are thus rising. Furthermore, the all-milk price projection was raised to $21.60 per cwt. For those in the market, this upward trend in pricing shows encouraging signals.
Butter, cheese, and whey prices will rise as the strong demand for dairy products continues until 2025. Though the NDM forecast stays, the same, higher product costs have driven up the Class III and IV milk price projections. The predicted 2025 all-milk price these days is $21.50 per cwt.
Beef Forcast
Looking forward to 2025, increased slaughter for outlying quarters more than offsets decreased predicted slaughter in the first quarter. These cattle will most likely be sold and killed in the second half of the year because they are put on feed in the first half. Furthermore, clothing weights are projected to stay high throughout 2025.
Given the limited cattle and beef supply, average prices for 2025 should be higher than those for 2024. With prices hitting $186 per cwt in the fourth quarter, the fed cattle price projection for 2024 was calculated at $184 per cwt. The average throughout 2023 per cwt was $175.54.
Feed Supply, Price Forecasts
The WASDE data from the USDA provides possible information on dairy feedstuff availability and pricing:
Comparatively, the 2024-25 U.S. corn projection is the same this month compared to the previous month.
Forecasts for global coarse grain output for 2024–25 show 1.4 million tons down to 1.511 billion. Relative to last month, this month’s foreign coarse grain prognosis shows lower output, somewhat greater trading, and smaller ending stockpiles. Foreign corn output is slightly higher, rising for Ukraine and Zambia, somewhat offset by a decline in Russia.
From the May projection, the expected season-average corn price received by growers remained the same at $4.40 per bushel, down 25 cents from the 2023-24 average of $4.65 per bushel.
This month’s U.S. soybeans for 2024–25 show greater starting and ending stockpiles.
Higher starting stockpiles indicate lower crush for 2023–24, down 10 million bushels on less soybean meal.
The Bottom Line
Based on the USDA’s most recent estimates, milk output is predicted to be constant for 2024–25 despite expected price rises resulting from significant demand for dairy products. Likewise, beef output is steady, yet tighter supply might lead to more expensive goods.
Though pricing trends have dropped compared to past years, feed supply predictions for maize and soybeans reveal an unaltered view. As dairy and cattle farmers control expenses, this might provide both possibilities and problems.
Juggling consistent output, price changes, and feed expenses will be vital for the agricultural sector. Markets for dairy and beef must adapt and be creative to ensure profitability and sustainability.
Key Takeaways:
Milk Production: Milk production forecasts for 2024 and 2025 remain unchanged from last month, with only slight adjustments. The 2024 production is estimated at 227.3 billion pounds, a modest increase from 2023’s total of 226.4 billion pounds.
Milk Prices: Price forecasts for butter, cheese, whey, and nonfat dry milk (NDM) are raised for 2024 due to recent price strength. The Class III milk price is now forecast at $17.90 per hundredweight (cwt), while Class IV is projected at $20.50 per cwt. The all-milk price is raised to $21.60 per cwt.
2025 Milk Production: The production estimate for 2025 remains steady at 229.3 billion pounds. Prices for butter, cheese, and whey are expected to rise due to strong demand, while NDM prices remain stable. Class III milk is forecast at $17.70 per cwt and Class IV at $20.10 per cwt. The all-milk price for 2025 is $21.50 per cwt.
Beef Outlook: Beef production and average cattle prices are forecast to rise in 2025. Despite lower expected slaughter in the first quarter, increased slaughter in subsequent quarters and higher dressed weights are expected to sustain production levels.
Feed Supply: The 2024-25 U.S. corn outlook remains unchanged, with foreign coarse grain production slightly lower. Soybean beginning and ending stocks are projected higher, with the soybean price forecast at $11.20 per bushel. Dairy-quality alfalfa hay prices averaged $315 per ton in April.
Summary: The USDA’s 2024-25 forecast provides a comprehensive view of the dairy industry, including milk production, pricing, and changing patterns. It predicts steady milk output, increasing exports, and rising prices. The global dairy industry’s solid demand forecasts drive export projections for fat and skim-solids bases. Import forecasts for 2024 and 2025 show the same increases, driven by planned imports of butter and milk protein-containing products. The positive trend in price increases has raised milk prices in Class III and Class IV for 2024. Beef forecasts show increased slaughter for outlying quarters, while average prices for 2025 are expected to be higher than those for 2024. Balancing consistent output, price changes, and feed expenses will be crucial for the agricultural sector.
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The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
Statistics
The technical storage or access that is used exclusively for statistical purposes.The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
Marketing
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.
