The global skim milk powder market is experiencing a shift in price dynamics, with currency movements currently playing a larger role than fundamental factors in determining regional competitiveness.

European SMP prices have found support despite weak fundamental conditions, as the EUR/USD exchange rate moved from 1.17 to 1.14-1.15 over recent days. This currency movement is allowing European exporters to ask slightly higher prices while seeing an uptick in demand from international buyers.

The EU Vesper Price Index for SMP decreased to €2050 ($2355/mt or $1.07/lb) EXW as of November 5, 2025. Oceania SMP is priced at €2176 ($2500/mt or $1.13/lb) EXW, while US SMP declined to €2149 ($2469/mt or $1.12/lb) EXW.

Currency effects on regional pricing

The weaker euro is providing a competitive advantage for European SMP in export markets. European exporters are making use of the favorable exchange rate, with the timing of Gulfood presenting opportunities to engage with buyers from key import regions.

The stronger US dollar is bringing US SMP and NFDM prices down towards the $1.1/lb mark due to increased competition from European suppliers.

This week’s GDT auction showed New Zealand C2 SMP increasing $15/mt compared to the previous event, while forward prices fell slightly, indicating expectations of good milk production for the remainder of the season.

Fundamental conditions remain weak

Global SMP markets are fundamentally weak, as they have been for months. Production is stronger than usual due to higher milk intake across major producing regions, while total demand for SMP appears lower.

Milk production continues above year-ago levels, with French collections up 5.1%, German collections up 6.5%, US production up 3.25%, and New Zealand starting the season with a 2.46% surplus in milk solids. This higher milk intake is translating to relatively high supply that is expected to persist.

Market outlook

Fundamentally, SMP prices are expected to continue trending lower. However, the currency story could play a significant role in a global market such as SMP. Excluding currency effects, subpar demand is meeting relatively high supply that will continue for some time.

This article is part of a more comprehensive dairy market analysis. For the full analysis, visit: https://app.vespertool.com/market-analysis/2420