SMP Price Trends
Skimmed Milk Powder
Price movements
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Skimmed milk powder MH exw EU EBP
Month-on-month Change
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Whole milk powder spray exw EU EBP
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Nonfat dried milk fca US EBP
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Whole milk powder exw US EBP
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Skimmed milk powder auction fas NZ/AU
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Whole milk powder auction fas NZ/AU
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Key Takeaways
- The price of Skimmed Milk Powder (SMP) EXW Europe [Expana Code: J117] was assessed at €2,700/MT on March 31, up €175/MT MOM, supported by strong buying interest from North Africa, China, and Southeast Asia, compounded by tight US supply redirecting demand toward EU suppliers.
- Sentiment cooled at month-end as buyers paused to reassess following recent price increases. EU SMP supply is expected to increase in April as the milk season approaches its peak.
- EU SMP production rose 1.3% YOY in January while exports climbed 8.79% YOY, reflecting competitive EU pricing on international markets.
- Nonfat Dried Milk US [Expana Code: NFDMW] reached a multi-year high of $1.90/lb on March 26, up $0.32/lb MOM, as US production fell 6.35% YOY in January with manufacturers prioritizing higher-margin products, leaving inventories tight to sold out.
- The price of Whole Milk Powder (WMP) spray EXW Europe [Expana Code: J118] was €3,500/MT on March 26, up €225/MT MOM, underpinned by steady domestic and international demand and short EU delivery horizons into North Africa and the Middle East.
- EU WMP production fell 9.32% YOY in January, with output driven primarily by contractual commitments. Competitive pricing from NZ and South American suppliers continued to limit EU export leverage, though pressure is expected to ease as Southern Hemisphere milk seasons wind down, noted industry players.
EU SMP prices jump to €2,700/MT on robust global demand
- The EBP for Skimmed Milk Powder (SMP) EXW Europe [Expana Code: J117] was assessed at €2,700/MT on March 31, up €175/MT on the month.
- EU skimmed milk powder (SMP) prices rose steadily from €2,680/MT to €2,700/MT across the three weeks, supported by strong buying interest from North Africa, China, and Southeast Asia, compounded by tight US supply redirecting demand toward EU suppliers.
- Sentiment weakend slightly during the tail end of the month as buyers paused buying to reassess the market structure following recent strong price increases. Supply remained broadly in line with year-ago levels, supported by increasing fresh production.
Increasing Production
- SMP supply is expected to increase further in April, driven by seasonally rising milk intakes as the milk season approaches its peak in May. While cheese and whey continue to offer stronger valorization, butter and SMP production will likely benefit from the increased milk availability. Market players anticipate fresh production to outpace typical seasonal patterns, ensuring stable to improved SMP availability throughout the month.
- Inventories are expected to build, supported by fresh production outpacing demand, with market participants managing stock levels carefully to avoid excess carryover while maintaining supply security, according to market sources.
Mixed Demand Outlook
- Domestic EU demand is expected by industry sources to ease following strong buying activity and solid short-term coverage heading into April. Most buyers continue to work on short-term contracts during the first half of 2026, while focus for the second half shifts to longer-term agreements.
- International demand remains mixed. The Middle East continues to be a key trade partner for EU exporters, but buying interest from the region remains uncertain due to the ongoing conflict in the Middle East, according to market sources. APAC demand remains steady, though EU competitiveness continues to be impacted by extended shipment times as freighters reroute around Africa to avoid the Red Sea amid Houthi attack concerns.
- Tight SMP supply from the USA could offer an opportunity for EU exporters, as US trade partners may seek alternative suppliers to ensure supply security and competitive pricing, according to market sources.
Market Sentiment
Skimmed Milk Powder
Supply
US
NFDM Output Rebounds Monthly Despite Continued Annual Decline
NFDM production decreased 6.35% YOY in January to 144.84 million lbs, according to the latest USDA data. However, output rose 14% MOM from December 2025, reflecting a meaningful recovery as processors ramped up activity following the production downtime seen at the end of 2025. Strong milk supply and firm NFDM demand supported the rebound during January, with processors looking to catch up against a tightly supplied market.
EU
EU SMP Output Edges Higher Annually Despite Seasonal Monthly Pullback
EU SMP production rose 1.3% YOY in January to 108.74 MT, according to the latest Eurostat data. Output fell 21.2% MOM from December 2025, reflecting a typical seasonal decline in milk availability following the strong year-end flush. While underlying milk volumes remain robust Y-O-Y, the seasonal pullback in supply weighed on production during the month. Additionally, strong valorization across competing dairy categories, including Whey and Cheese, incentivized processors to channel available milk away from the SMP production stream, acting as a further headwind to output during January.
According to the European Commission, SMP exports in January rose 8.79% YOY to 67,860 MT, up approximately 1% MOM from December 2025. EU price levels remain competitive on international markets, continuing to support robust export volumes despite the seasonal softening in production during the month.
Skimmed Milk Powder
Price drivers
Logistics
The Global Shipping 40-foot Container Composite Index rose about 20% MOM in end-March to $2,279/unit, marking four consecutive weeks of increases. Following US and Israeli military action in Iran, energy prices spiked, prompting shipping carriers to apply emergency fuel surcharges to freight rates, driving higher spot rates on Asia-Europe and Transpacific routes.
Market sources expect rates to remain elevated if regional volatility persists. Carriers continue to await demand growth following the Chinese Lunar New Year, which has been slow to materialize.
Feed Costs
Geopolitical tensions in the Middle East and Eastern Europe continue to underpin the market sentiment, sustaining a risk premium across global grain markets. The strategic importance of the Strait of Hormuz is increasingly reverberating through fertiliser markets, adding a secondary layer of support to prices.
In the EU, market participants report that wheat crop conditions currently appear favourable, with development slightly ahead of normal thanks to generally supportive growing conditions across key producing regions. CBOT wheat prices have shown relative strength in March, supported by mounting concerns over Hard Red Winter wheat prospects in the southern US Plains.
Global corn markets are increasingly shaped by input cost pressures and shifting acreage expectations, with fertiliser availability emerging as a key factor influencing both planting decisions and yield potential across major producing regions.
Electricity Prices
Electricity prices in the US and EU changed marginally on average for the month, though volatility throughout March was high, particularly in the EU. Nevertheless, market sources continue to monitor the situation closely, recognizing that risks of electricity price increases remain high.
Skimmed Milk Powder
Price forecast
Skimmed Milk powder
The price of SMP has been increasing quite sharply in 2026 and we expect prices to remain high going into Summer. We are currently in a sort of perfect storm for SMP. We have seen less skim milk flowing into dryers in recent years and instead flowing towards cheese plants, even though the overall milk flow has increased. Additionally, processors actively walked away from SMP due to the lower margins, which affects overall supply. Furthermore, it takes time to restart dryers once they are shut down. Therefore, supply could not respond to the increase in demand that we started to see by the end of 2025/beginning of 2026. Usually, we would see export demand decline rapidly with high prices, but this time it did not decline fast enough.
Additionally, the demand composition shifted towards "sticky" users, who cannot easily substitute away from SMP. All of this has led to these high prices, which are well above those in the EU and NZ. However, imports from those countries are not a viable option due to TRQs, which make it increasingly expensive to import SMP. Therefore, we cannot see relief for domestic users through that channel either. Thus, we need to wait for the overall situation to get better, which takes time. Adding the current war on top of all of this is also pushing prices higher due to increasing energy costs. As SMP is energy intensive to produce, the increase may hit harder than for other commodities.
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