There is no shortage of milk anywhere. Output in the major exporting regions is still running ahead of last year, and New Zealand is at its seasonal peak. The problem is that the two halves of that milk are behaving very differently.
Protein is the easy half. Demand keeps growing in every region and buyers take whatever skim they can get, whether it ends up as SMP, MPC or condensed skim. European SMP prices have climbed week after week because nearby product is genuinely hard to find, and plenty of buyers still have Q4 and 2027 positions to cover. Algeria’s ONIL is tendering this week for February to April 2027 volumes, and since Algeria has imported little so far this year, that tender could be large.
Fat is the hard half. Consumers are not eating more butter at these lower levels, and they are not eating more ice cream or pastry either. Butter stocks are high in every major origin, and every extra liter of milk adds more cream to a market that already has plenty. European prices did tick up over the past week as a few buyers came in around the lows and cream firmed seasonally, but most of the selling pressure is still coming from traders rather than producers. Ireland is finishing its season strongly, which adds more fat again.
WMP sits between the two and keeps cancelling itself out.
Read the full butter, SMP and WMP market analysis here.
