As expected, the dairy market’s supply side is still strong in the Northern Hemisphere. The latest production numbers show increases between 0.5% and 2% for big producing countries like the US, Germany, and the Netherlands. Although some supply constraints prevent the anticipated ‘enormous’ oversupply, and several countries are not showing the same increased numbers regarding commodity production, EU28 and US production volumes of butter and SMP are still up 3-4%. Demand, however, seems to be the main driver at the moment. There is enough to keep prices of some products around current levels, but demand seems to stay away from the protein side if possible. Local demand, as well as export demand, is lower compared to last year. Overall, we are looking for a bottom, but nobody knows where that bottom lies. We will just have to wait-and-see.

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