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Welcome to the Bull Vine Podcast, your go-to source for inside stories, cutting edge research,

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and the latest updates in the world of dairy farming.

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In our 139th episode, we explore the latest global dairy market trends.

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So please grab a glass of milk, sit back, and let's get started with this episode.

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Welcome to the Bull Vine Podcast.

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I'm Douglas, and today we're joined by Bella to discuss the latest global dairy market

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report.

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Bella, what's the overall picture as we start 2025?

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Thanks, Douglas.

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As we kick off 2025, the global dairy markets are showing mixed signals.

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We're seeing commodity prices strengthening in key areas, while production trends vary

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across major exporting regions.

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From rebounding Chinese demand to ongoing challenges in the U.S., dairy farmers are

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facing a complex landscape of opportunities and hurdles.

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That's quite a mix.

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Let's dive deeper into these trends.

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Can you break down the commodity prices for us?

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Certainly, Douglas.

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The dairy commodity markets have shown resilience in several sectors, offering a glimmer of

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hope for producers who have been grappling with tight margins.

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Let's start with the futures markets.

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On the European Energy Exchange, or EEX, butter futures have rebounded significantly.

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The January-August 2025 strip is averaging €7,295, which marks a 1.2% increase week

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over week.

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This uptick suggests improved market sentiment for milk fat.

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Skim milk powder futures on the EEX also saw a modest gain, rising 0.4% to €2,655 for

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the same period.

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Over on the Singapore Exchange, or SGX, whole milk powder futures for February-September

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2025 showed notable strength, gaining 1.4% to reach an average of $3,940.

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SMP futures on the SGX platform also strengthened, climbing 0.8% to $2,970 for the corresponding

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timeframe.

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The global dairy trade auction on January 21 provided further evidence of market firmness.

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The overall price index increased by 1.4%, reaching $4,146.

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Whole milk powder jumped 5.0%, leading the gains.

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Skim milk powder rose 2.0%, indicating solid demand for milk proteins.

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Butter increased by 2.2%, aligning with the positive trends seen in futures markets.

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These results are encouraging for dairy farmers worldwide.

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The significant rise in WMP prices in particular suggests renewed buying interest from key

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importing regions.

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That's a comprehensive overview, Bella.

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It seems like there's a lot of positive movement in the markets.

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How about milk production trends?

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Are we seeing similar patterns globally?

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Actually Douglas, milk production patterns varied significantly across key dairy exporting

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regions, presenting both opportunities and challenges for the global market.

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Let's break it down by region.

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In the European Union and United Kingdom, November 2024 production was estimated at

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12.39 million tons, up 2.2% year over year.

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Milk production for January-November 2024 reached 148.6 million tons, which is 0.7%

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higher compared to 2023.

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The milk fat content was at 4.31%, while protein content was at 3.53%.

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Looking specifically at the United Kingdom, December 2024 production totaled 1.32 million

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tons, up 4.3% year over year.

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November 2024 was reported at 1.26 million tons, a 5.2% increase from 2023.

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The total for 2024 reached 15.48 million tons, up 1.1% from 2023.

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Milk composition in December showed 4.44% fat and 3.43% protein, while November had

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4.43% fat and 3.46% protein.

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Moving to New Zealand, December 2024 collections reached 2.65 million tons, up 1.4% year over

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year.

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The 2024-25 season to date totals 13.16 million tons, a 3.1% increase from the previous season.

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Milk solids production in December was up 1.4% to 228.3 million kilograms.

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For the 2024 calendar year, total milk solids production hit 1,923 million kilograms, up

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2.1% from 2023.

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It sounds like production is up in most regions.

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How about the United States?

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Are we seeing similar trends there?

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Actually Douglas, the U.S. dairy sector faced unique challenges in 2024.

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Overall production was down 0.5% for the year, primarily due to impacts from avian influenza

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in California.

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The December 2024 herd size was 9.351 million milk cows, just 3,000 more than December 2023.

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Regional variations were significant.

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California saw production plummet 6.8% due to bird flu impacts.

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On the other hand, Texas had an impressive 7.5% year over year increase.

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Idaho showed strong growth at 3.5%, while Wisconsin had a slight 0.1% uptick.

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A key factor limiting growth in the U.S. is the heifer shortage.

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While farmers are eager to expand given current price signals, the lack of replacement animals

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is a significant limiting factor.

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It sounds like production is up in most regions.

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How about the United States?

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Are we seeing similar trends there?

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Actually Douglas, the U.S. dairy sector faced unique challenges in 2024.

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Overall production was down 0.5% for the year, primarily due to impacts from avian influenza

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in California.

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The December 2024 herd size was 9.351 million milk cows, just 3,000 more than December 2023.

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Regional variations were significant.

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California saw production plummet 6.8% due to bird flu impacts.

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On the other hand, Texas had an impressive 7.5% year over year increase.

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Idaho showed strong growth at 3.5%, while Wisconsin had a slight 0.1% uptick.

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A key factor limiting growth in the U.S. is the heifer shortage.

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While farmers are eager to expand given current price signals, the lack of replacement animals

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is a significant limiting factor.

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That's quite a contrast to what we're seeing in other parts of the world.

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Let's shift gears a bit and talk about market forces and industry dynamics.

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What are the key factors shaping the current dairy landscape?

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There are several key factors at play, Douglas.

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First, let's look at global demand trends.

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Chinese imports saw significant year over year increases across various dairy products

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in December.

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Whole milk powder imports more than doubled, skim milk powder was up 42%, whey powder increased

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by 12%, and cheese rose 17%.

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This uptick in Chinese purchasing activity is fueling cautious optimism about global

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dairy demand recovery.

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In terms of feed market outlook, corn futures for March held steady at $4.8575 per bushel.

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Millions for March added 20 cents reaching $10.55, while soybean meal futures jumped

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$660 to $304 per ton.

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While feed markets show some upward pressure, prices remain relatively stable, offering

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farmers opportunities to lock in favorable rates for the coming months.

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We're also seeing interesting consumer trends and market evolution.

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Plant-based alternatives continue to gain market share, particularly in developed markets.

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However, traditional dairy maintains strong positions in emerging economies and specific

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product categories.

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In the U.S., domestic butter consumption increased by 7% in 2024, following a 6% rise in 2023.

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Those are some interesting trends, Bella.

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How about policy and trade developments?

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Are there any significant changes on the horizon that dairy farmers should be aware of?

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Absolutely, Douglas.

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Traditional policy and trade factors are poised to impact the dairy sector in 2025.

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In the United States, there are ongoing discussions about potential changes to the Federal Milk

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Marketing Order FMMO pricing system.

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These changes could affect risk management strategies for both producers and processors.

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In India, the Union Budget 2025 is set for presentation on February 1st.

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The dairy sector is anticipating measures to boost production through infrastructure

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investments and technological innovation.

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On the international front, potential tariffs and evolving trade agreements continue to

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create uncertainty in export markets.

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Dairy farmers and industry stakeholders will need to keep a close eye on these developments

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as they unfold.

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Given all these factors, from production trends to market dynamics and policy developments,

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what are the key implications for dairy farmers?

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How can they navigate this complex landscape?

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That's a great question, Douglas.

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Given the current market conditions, dairy producers should consider several strategies.

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One, optimize component production.

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With strong values for butter, fat, and protein, farmers should focus on nutritional strategies

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to boost milk solids output.

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Two, monitor input costs.

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It's crucial to keep a close eye on feed prices and explore opportunities to lock in favorable

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rates for the coming months.

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Three, herd management.

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In regions facing heifer shortages, prioritizing cow longevity and exploring alternative strategies

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for maintaining or growing herd size will be important.

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Four, risk management.

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Utilizing available tools such as futures contracts or forward contracts to hedge against

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price volatility can help mitigate risks.

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Five, stay informed.

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Keeping abreast of policy developments, particularly potential FMO changes in the U.S., will be

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crucial as these could significantly impact milk pricing.

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Six, market diversification.

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Exploring opportunities to tap into growing markets or product categories, such as value-added

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dairy products or exports to emerging economies, could open up new revenue streams.

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Those are some solid strategies, Bella.

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As we wrap up, what's your bottom line for dairy farmers as we move through the early

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months of 2025?

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The bottom line, Douglas, is that the global dairy market presents a complex and dynamic

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environment.

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Farmers must remain vigilant, adaptable, and focused on operational efficiency to navigate

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these challenging waters successfully.

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By staying informed about both local conditions and global market forces, producers can position

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themselves to capitalize on opportunities and mitigate potential risks in the evolving

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dairy landscape.

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Key takeaways for our listeners.

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One, dairy commodity prices showed strength in several key areas, particularly WMP and

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butter.

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Two, milk production is increasing in major exporting regions, with the notable exception

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of the U.S.

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Three, Chinese dairy imports have rebounded, potentially signaling improved global demand.

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Four, feed costs remain relatively stable, offering opportunities for strategic purchasing.

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Five, policy changes and trade developments continue to create both challenges and opportunities

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for the sector.

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Six, farmers should focus on efficiency, component production, and risk management strategies.

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Thank you, Bella, for this comprehensive overview of the global dairy market.

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To our listeners, we hope this information helps you navigate the complex landscape of

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the dairy industry.

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Remember to stay informed, adapt to changing conditions, and focus on efficiency in your

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operations.

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Until next time, this is Douglas, signing off for the Bull Vine Podcast.

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Thank you for tuning in to the Bull Vine Podcast.

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We hope you enjoyed today's insightful discussion.

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Don't forget to subscribe, share, and leave a review.

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Catch you next time on the Bull Vine Podcast, where bovine expertise and community come

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together.