Unlock Exclusive Insights with HighGround Dairy's Global Dairy Forecast Reports

Our team of experts released our January 2025 Global Dairy Forecast Report last week, which covers all the critical global fundamentals impacting prices today and into the future. In this newsletter, we want to give you a sneak peek of what is inside our report, but there is a lot more to discover. You can get the full scoop when you sign up free 30-day trial!

1. Uncertainty Clouds China’s Economic Outlook: China’s economy faces ongoing challenges, with weak consumer confidence, structural issues, and financial instability. Despite stimulus measures like infrastructure spending, tax cuts, and wage increases, recovery remains sluggish. The property market and dairy sector struggle with oversupply and declining demand, while geopolitical tensions add further uncertainty. As 2025 progresses, these factors will shape China’s growth trajectory and ripple across global markets.
2. EU’s 2025 Milk Production Forecast: Second, European milk production took an uncertain path in 2024, with factors such as animal disease, elevated milk prices, and a volatile market shaping the year. British farmers are responding to favorable prices with production running at least 4% ahead year-on-year, a trend echoed in Eastern European nations like Poland. However, environmental restrictions in Western Europe, including the Netherlands and Denmark, limit growth potential.
3. Global Trade, Supply Chain Dynamics: Expensive shipping rates from China to the U.S. reflect a rush to secure goods ahead of potential policy shifts as Trump takes office. But once the administration changes, all bets are off. The interplay of geopolitical uncertainty, shifting trade policies, and evolving supply chain strategies could lead to significant market disruptions—or new opportunities.
4. US Dollar Strength Hampers Purchasing Power: The continued strength of the US dollar has the potential to significantly strain global dairy buyers by raising the cost of dollar-denominated imports like milk powders and whey. Depreciating local currencies, coupled with moderating economic growth in nations like China and Indonesia, are forcing buyers to scale back or explore alternative sourcing strategies.
5. High Protein Whey & MPC Demand Red Hot: Lastly, trade flows and surging prices in the high-protein dairy ingredient market were pivotal in 2024, driven by consumer demand for protein-rich foods. This shift is reshaping milk processing trends, with expectations for continued growth in 2025.

1. Cheese Prices: Cheese prices have rallied from their lows a month ago, however, this may be short-lived as new production capacity comes online. Even so, the climb has narrowed the gap between US and European cheese prices which export business has been benefiting from.
2. California Milk Production: California milk production plummeted 9.2% YoY in November under the constraints of bird flu. Milk per cow drove the big loss as yields sank to 1,730 pounds, the lowest mark on a 30-day adjusted basis since July 2006. The decline in milk resulted in lower output of cheese, nonfat dry milk, and butter during the month.
3. Butter is Baffling: Despite a 12.8% YoY drop in butter output from California, the US pumped out 4.4% more butter than a year ago driven greater output from other Western states and strong Central region churns. Strong domestic demand with a boost from export interest as well helped to keep the market in balance as CME spot butter held between $2.50 - $2.60/lb. in November and December.
4. Protein Power in 2025: Consumer interest in protein-rich foods continues to grow aided by the rising use of GLP-1 drugs. Low-fat cottage cheese and yogurt production soared in 2024 as a result and are expected to see further demand in 2025. Additionally, whey protein concentrates and isolates, and milk protein concentrates output have also risen as protein additives in various food formulations.
5. A Strong US Dollar & the Lending Environment: The macroeconomic environment may pose challenges in 2025 as sticky inflation and stronger-than-expected jobs data may slow Fed plans to reduce interest rates. The incoming Trump administration has taken a hard stance on trade relations with Mexico, China, Canada, and the European Union which, along with a stronger US dollar, could materially impact trade in 2025.

This is only a snippet of our comprehensive report. To read our complete analysis, including our market opinion and global price forecasts, request a free trial today!

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