Join Ever.Ag’s Kathleen Wolfley and Joanne Bills for a fast-paced look at the latest market movers across the globe. From South Korea’s surging dairy imports and Europe’s falling milk and butter prices to China’s ongoing production cuts and New Zealand’s strong start to the season—this week’s Chart Chatter connects the dots on shifting supply, demand, and trade flows in the global dairy scene. Plus, Jo reveals how U.S. butter is landing on Australian shores for the first time in years.
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In this segment is meant for educational.
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Purposes and is not a.
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Solicitation to buy or sell commodities. Welcome to Chart Chatter spend ten minutes with two Ever.Ag colleagues into wildly different time zones to nerd out on global dairy market charts. Except this week Vuko, Ever.Ag’s data wizard is still off on holiday. I’m Kathleen, market intelligence director at Ever.Ag Insights in the US, and today I have with me one of the best in the business, Joanne Bills, Australian rock star, Dairy analyst and an all around nifty gal.
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Jo, what is your title with Ever.Ag?
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Thanks, Kathleen. Great to be with you. My title is Global Insights Director slash Australian rock star.
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It’s just too bad we don’t hand out business cards anymore.
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That’s right.
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Well, Jo, welcome to our chatter. It is currently 530 Eastern Time in Buffalo, New York. And Jo.
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It’s 851 on the 16th of October in Melbourne. And it’s a beautiful sunny day.
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Wonderful. Well, we are going to kick it off. We’ve got some awesome charts today and some charts that are hot off the presses. I gotta love a hot off the press chart. And we’re going to start with South Korea Imports South Korea Chinese imports for September totaled 15,270 metric tons. That was up 30% year over year. Notably, volume from the US topped 7000 metric tons.
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That was up a whopping 77% from September of 2020 for European volumes picked up as well, up around 10% year over year. Oceania volume did not perform quite as well, but in general, some pretty solid volumes imported into Korea during the month of September. Year to date looking at up 30% year over year, the highest volumes since 2021.
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So some pretty solid volumes heading into South Korea.
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Yeah, absolutely. So so what what does that leave us with regional market share for that South Korean market? Kesley.
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Well, as you can see on the chart here, the US is leading the pack 44% market share year to date through September. The EU is sitting around 34% in Oceania at just over 20%. And that’s a little shape shifting from what we saw in 2024, as well as in 2023, where the EU had a bigger share. But in general, the US is seeing some uptick in in that share percentage compared to years past.
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All right, Jo, thinking about the European marketplace, what about spot prices. What are you seeing for milk cream and butter spot prices in Europe.
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Yeah. Thanks, Kathleen. This is you know, something that we track from week to week. We’re seeing this continued weekly growth in the major producers of France and Germany, in the EU and those, year on year rates. Obviously, they’re against, prior year comparatives that were pretty badly affected by bluetongue, in 2024. Pretty impressive growth rates though.
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And we’ve really seen milk spot prices plummeting, say see that Green Line spot milk price for North Germany? It’s really come down in the last few weeks, from about mid-September when everyone came back from the European holidays and we got the news on the, European stock situation for butter in particular, which I know you’ve covered in previous chat chats with Zucco.
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We just see that the spot prices are under a lot of pressure. Obviously what’s being paid to farmers at the moment is a little bit higher. It’s still in the 50 cent range spot prices are at the 30 cent range, but those higher prices will have to come down. They will be under pressure from these, spot movements.
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So you can just say cream stabilized just in the last couple of weeks. But that’s also rapidly come down. And butter has done the same thing. Looking ahead, Kathleen, I mean, until farmers really feel the pain of these lower prices, we’re probably going to see EU production continue to grow at least year over year. We think 1 to 2% for the whole year.
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Good flood of supplies are probably insulating your pain producers somewhat, and the pain might not really be felt until after, you know, into Q1 26.
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Where do you think butter and cream prices go in Europe? We’ve certainly seen a massive slide in a short amount of time. Do you think that there’s more room to go? I know Luca is has weighed in on this as well, but I’m just curious if we’re a couple of weeks from when Buchanan and I talked about it last.
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Do you think that there’s more downside risk here?
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Look, there could be Kathleen. I mean, I think a lot of people in Europe, hoping that the low prices will spike a bit of demand. Obviously, exports been very difficult out of Europe for both butter and cheese at these kind of prices. And we’re starting to see from traders just reporting a bit more, export interest because these prices are, quickly coming back to the pack.
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And really, the US has been the benchmark in terms of, of, cheese prices into international markets. So I think there’s there’s going to be, you know, some countervailing improved demand, but also this supply response is probably going to be a ways off. And we’re seeing in Europe what we’re seeing in a lot of other regional areas. That’s really been pioneered by the US.
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The dairy beef situation. You know, some of these supply responses are going to be really influenced by what farmers can get for their their cull cattle. So what the beef prices are going to be like as well. And they’re very strong in Europe as well. So that might help that supply response and even things out. But just for now, you know, I think like I said, a couple of weeks ago, the market’s probably found the bottom.
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It’s just these prices are getting along sideways. But really anything can happen from year I think.
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So in the U.S. and in the EU, it seems like we’re not culling quite as many cows. But in China they’ve been culling cows pretty aggressively in the last several months. For the 15 month in a row, we’ve seen Chinese milk production down on a year over year basis, down 4.5% year over year. And clearly, this brings us to our chart number three of the week.
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Overall milk prices reportedly have stabilized some in China. That may be some seasonal stabilization but still at very weak levels. And from what I’ve been reading and picking up, doesn’t seem as though analysts are all that optimistic about potential for upticks in milk prices from here. At least in the near to medium term. Certainly lower feed should help the margin picture on Chinese dairies.
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But when we look at the supply demand picture in China, it remains fairly weak. As I was reviewing some of the the stock level data, as well as some of the consumption figures that we see out of China, it does suggest that things are starting to improve modestly. But Jo, you and I were talking before the call about some of the major dairy suppliers or dairy companies in China, and their stock portfolios are still not all that strong, suggesting that it’s pretty tough sledding yet in, in the Chinese dairy markets.
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Yeah, I think that’s right, Kathleen. I mean, it’s always the case with China that the data is the data. And sometimes it’s not always totally to be relied on. So, you know, I know in our group we look for lots of different indicators of what might be going on within the Chinese market, because even for people in China, it’s pretty opaque.
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And and you’re right, we have seen some better figures in August in terms of consumption and stocks to use ratio. We have seen those raw milk prices. They’re still low not moving lower milk production down. That all seems pretty positive for import requirements. But then you say the big Chinese companies like Main Way. And really their actual sales results are still pretty dire.
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And all of this is in the context of the broader economic challenges that that China is facing. And obviously the trade issues that are not going away and and could well spike in the next month or so. I don’t I don’t think anyone’s out here going China’s back or anything like that any time soon.
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Jo, can you talk to us about what’s going on with New Zealand milk production?
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Yeah. Look, I think this has been a really interesting I mean, in the context of China, you know, probably not having significantly larger import requirements. It always makes us think about, well, what’s New Zealand going to do with their milk. And obviously the start to the New Zealand season, the first couple of months of milk production data, we’ve seen have been really strong record months, albeit very low production months.
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Seasonally, we’re seeing reports out of New Zealand that the pasture conditions aren’t you know, fantastic in some parts, particularly in the North Island, it hasn’t been great pasture conditions. But what we do have is a second year of, in New Zealand terms, $10 a kilogram milk solids price and very confident farmers. We’ve seen some rollbacks in, policy that was affecting milk production in New Zealand.
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We’ve got these good prices, we’ve got plentiful supplies of pretty cheap for most of it. Palm kernel expeller that goes into new Zealand. We’ve seen those imports really strong. And this is just another piece, I think of the puzzle. Kathleen. We’re seeing New Zealand dairy cow slaughter much lower than in previous years. And you can see on this chart it’s got a really seasonal peak just before the New Zealand start season starts in June.
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There tends to be a big reduction or culling of herds. Get out the passengers, get the girls that you know aren’t performing out of there. And this year we’ve really seen that. That’s that’s not the case on an annual basis. For the 12 months to August, culling rates are down 7% based on these slaughter statistics. And it’s lowest annual slaughter number in New Zealand since 2017.
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So I think, you know, what we’ve got is is an almost perfect storm of okay, not brilliant pasture conditions, few more cows on hand and the margins, to be able to supplementary feed and actually feel any pasture gaps they’re facing in New Zealand. So, you know, we’re likely to see that this strength in milk production is going to continue at least through the the spring peak.
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And then, you know, we might say as in 2024, we have a little jump in those sort of numbers again as, as the, the passengers are offloaded. But really interesting to watch what’s happening with these slaughter numbers this season. Kathleen, I’m.
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Curious in New Zealand, is the beef market quite is supported as what we’re seeing in the US. And I think even in the EU.
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Yeah. Look, I mean that’s that’s been an interesting one in New Zealand beef has been beef prices have been quite strong and there is a lot more discussion emerging about dairy beef. But we did say earlier in the year there were some issues with just processing capacity in New Zealand, and that’s probably kept a lid on some of the prices early in the year, some trimming of shifts because the the actual beef industry was not performing so well.
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So it’ll be interesting to see, you know, if if the beef prices continue to rise in New Zealand, if there is more of a culling. Right, or, you know, if farmers are really going to try and hold on and just max out production while they’ve got this price ahead of them. Jo.
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You have the distinct pleasure this week walking us through the chart of the week.
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I do feel on it, yes.
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You talk to us about Australian imports.
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Yeah. Look, I just, because I’m an avid watcher of chat chatter every week. Kathleen, I noticed a couple of weeks ago that you and Vico did do a little item. It might have even been a chat of the week on Australian production and that Australian production, bucking the trend everywhere else in the world is falling at the moment.
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Pretty tough conditions here in Australia. And you raise the question, does that mean more imports? And I know we’re a tiny country. We’re only 28 million people and we’re on the other side of the world. But I just wanted to update you and let you know that yes, US border is reaching our shores. So look at here.
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I mean, this chart just shows in the orange bars. It says that. But that is basically the US big increases in the US border imports this year, 2349 tons between April and August from nothing the year before. I think the last time we had any imports of us. But, when I look back was maybe 20, 22, perhaps, not huge volumes, obviously, and it won’t change the balance sheet for the US dairy industry.
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I understand that, and I haven’t seen that it on my supermarket shelf as yet, but just interesting to see where this goes Kathleen, because the US has been highly competitive and obviously US exports are looking far and wide for market opportunities. And it’s it’s reached our shores. So the US import share is also, increased to 42% in August.
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And it generally sits around 25 to 30% share on an annualized basis historically. So you know, the Americans are coming, Kathleen.
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How does that compare to a US state? We’re talking about closer to Texas population then similarities between Australia and Texas. Their deserts.
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There’s lots of cows, cattle, beef cattle.
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Yes, lots of cows, beef cattle, dairy cows.
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Barbecues.
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Desserts.
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Yes.
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There’s barbecues. Perfect. Well that’s it for our chatter this week. A huge thanks to Jo Australian rock star dairy analyst and to Nanna and the ever ag marketing team for mixing and mastering. If you’d like to learn more about how the ever AG Insights team can support your business, or if you have chart request or have strong opinions about crocodiles versus alligators, please contact us at Insights@Ever.Ag.
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