According to the latest Ornua market report, milk production in the world is unlikely to grow by more than 0.5% in the first quarter of 2019.

New Zealand milk production grew by 7.7% at the end of 2018, while US supplies were expected to grow at a more modest 0.5%. In contrast, milk production in the EU fell by about 0.8%.

“EU and New Zealand flows over the next few months will be key drivers of market movement,” the Ornua report says. World exports ended 2018 on a positive note, driven by exceptionally strong powder purchases from China and, to a lesser extent, from Southeast Of Asia. This model continued in the first quarter, and bidding at the world's leading auction for the sale of large volumes of dairy products (GDT) increased over the past seven auctions.

However, the Ornua report noted that demand elsewhere was more sluggish: trade wars and weaker economic growth affected sales: “The butter market has weakened. Although production slowed, it grew faster than demand, and stocks returned to normal levels. ”Wholesale prices of butter in the Dutch market fell from 4,400 euros per ton in January to 4,070 euros per ton last week. Cheese purchase remains calm, although market prices are stable.

The whole milk powder (SMP) market has stabilized after Christmas. This was observed at wholesale prices for SMPs in the Netherlands, which rose from 1,500 euros per tonne from October last year, but currently have not changed to 1970 euros per tonne. Ornua also notes that strong Chinese imports have boosted the market for whole milk powder although demand for it in other regions, such as the Middle East and North Africa, was low.