Insight Focus
Dairy markets were mixed, with proteins outperforming commodity powders. Nonfat dry milk prices were volatile but showed signs of stabilising, while WPC, WPI and lactose remained supported by tight supplies and steady demand. Milk production improved as cooler weather eased heat stress, while butter and cheese markets remained balanced with production and demand largely aligned.
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Protein Strength Offsets Volatility in Nonfat Dry Milk
This week’s dairy markets were mixed, with nonfat dry milk rebounding late in the week after an early decline, while higher-value protein ingredients held their ground. Milk production improved modestly in several regions as cooler weather boosted cow comfort, supporting butter and cheese manufacturing.
Trade sources pointed to signs of stabilisation in the nonfat dry milk market, though prices remained volatile. Values fell early in the week as supplies increased before rebounding on Friday. Domestic and export demand was steady, with some Mexican buyers seeking product from specific manufacturers where inventories were tighter.
Higher-value dairy proteins continued to outperform commodity powders. Whey protein concentrate 34% strengthened across most of the range, as limited production kept spot availability scarce and buyers sought to secure 2027 volumes. Whey protein isolate remained tightly supplied, with expectations for further price gains. Lactose also strengthened, with several suppliers sold out through the third quarter and fourth-quarter spot offers approaching 80c/lb. Dry whey was mostly stable, supported by export demand, particularly from Asia.
Milk Production Recovers as Heat Stress Eases
Milk output improved modestly across much of the Central and West regions after recent heat subsided, though production and component levels remained below early July levels in several areas. Spot milk was still difficult to source in the Central region, with prices ranging from USD 1 to USD 5 over Class III, as cheesemakers retained additional milk to support busy production schedules.
Cream supplies were adequate, but Class II processors continued to absorb most spot volumes as ice cream manufacturing chugged along. Demand for Class I milk also began to strengthen in some regions as schools prepared to resume classes.
Butter and Cheese Markets Remain Balanced
Butter production was seasonally strong, supported by comfortable cream availability. Domestic demand from both retail and foodservice channels was consistent, while export interest provided additional support.
Cheese production strengthened as plants returned to full schedules following recent downtime. Demand was firm heading into the back-to-school season. Overall, cheese markets were balanced, with production and demand largely aligned across retail, foodservice and bulk channels.
