Dairy Processing - March/April 2024 - 66

COMMODITIES OUTLOOK
weaker
than expected
The market looks bullish for nonfat dry milk, while higher prices
of dry whey exports have slowed domestic demand.
by Nate Donnay | nate.donnay@stonex.com
M
ilk powder markets generally made their lows in
mid-2023 and trended higher in the second half of
the year, but the stories have diverged during the
first quarter of 2024. The supply side has been weak, with
milk production running below the previous year, which was
supportive for all of the milk powders, but the sides are now
drawing apart based on demand dynamics.
BULLISH OUTLOOK
At a high level, the nonfat dry milk (NFDM) supply and demand
looks bullish. Production of NFDM and its close relative, skim
milk powder (SMP), was down 14.7% year-over-year (YoY)
during the second half of 2023, while exports were only down
5%. That resulted in stocks being pulled lower and ended the
year down 20.5%, which put them at the lowest level since 2015.
66 MAR-APR 2024 | DAIRYPROCESSING.COM
SMP production in Europe was also down for the year and
it looks like inventories there were pulled lower, as well. So
production and inventories in the Northern Hemisphere are
down YoY and the market looks a little tight.
However, SMP production in New Zealand has ramped
higher as Chinese demand for whole milk powder (WMP)
remains weak and processors have had to shift their product
mix to find other buyers for their milk products. On top of the
increased New Zealand production, the demand side is soft.
Mexico is the biggest buyer of US NFDM and its imports
slowed in the fourth quarter, and imports for the first quarter
look to remain weak as it deals with increased domestic milk
production and some cooling in demand.
China is the largest importer of dairy products and its
import demand remains weak. Milk production in China has
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Dairy Processing - March/April 2024

Table of Contents for the Digital Edition of Dairy Processing - March/April 2024

Dairy Processing - March/April 2024 - Intro
Dairy Processing - March/April 2024 - 1
Dairy Processing - March/April 2024 - 2
Dairy Processing - March/April 2024 - 3
Dairy Processing - March/April 2024 - 4
Dairy Processing - March/April 2024 - 5
Dairy Processing - March/April 2024 - 6
Dairy Processing - March/April 2024 - 7
Dairy Processing - March/April 2024 - 8
Dairy Processing - March/April 2024 - 9
Dairy Processing - March/April 2024 - 10
Dairy Processing - March/April 2024 - 11
Dairy Processing - March/April 2024 - 12
Dairy Processing - March/April 2024 - 13
Dairy Processing - March/April 2024 - 14
Dairy Processing - March/April 2024 - 15
Dairy Processing - March/April 2024 - 16
Dairy Processing - March/April 2024 - 17
Dairy Processing - March/April 2024 - 18
Dairy Processing - March/April 2024 - 19
Dairy Processing - March/April 2024 - 20
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