Milk Powder Market - United States
Milk powders and lactose remain major export commodities for the US dairy industry, particularly non-fat dried milk (NFDM), which consistently ranks as the top exported dairy product. After reaching a peak in 2022, US NFDM exports have been on a steady decline. In January 2025, Mexico and Southeast Asia accounted for over 80% of total NFDM exports.
NFDM prices began falling during Q4 2024 and into Q1 2025 due to high price levels in prior months, which deterred international buyers. The Oceania region, a major global competitor, saw record export volumes in 2024, forcing the US to remain price competitive.
More than 80% of lactose produced in the US is exported, with China and Southeast Asia being the largest importers (collectively over 15,000 metric tonnes). The reintroduction of tariffs under the Trump administration led to retaliatory measures by some Southeast Asian nations and China, raising concerns about the stability of the lactose market.
NFDM prices fell sharply in April 2024 as inventories increased, and export demand softened. While prices rose again through Q4 2024 and into Q1 2025, high levels pushed the US out of international competitiveness, leading to renewed price declines into Q2 2025.
US Forecasting Insight
The price of NFDM/skimmed milk powder has declined since the beginning of 2025 and is currently in a downtrend. We expect this downtrend to continue throughout the year and into 2026. There should be shorter periods of upward correction in this longer decline, but they should only be temporary. Nevertheless, we could see a significant increase in the home market, which is likely part of why prices may decline in 2025.
Milk Powder Market - European Union
Skimmed milk powder (SMP) remains a key EU dairy product with strong domestic and international demand. In 2024, SMP production totalled 1.38 million MT, representing a 2% year-over-year decrease. Like the butter market, this reduction was due to processors favoring more profitable cheese and whey streams.
Prices for SMP were volatile throughout 2024 and into Q1 2025, fluctuating between €2,225 and €2,650/MT (EBP - J117). While domestic demand remained stable, many buyers opted for short-term, smaller contracts to maintain flexibility. The chocolate industry, in particular, leaned toward smaller purchases amid uncertain consumer demand and rising cocoa prices.
Once prices approached €2,600/MT, a notable drop in buying activity occurred. In the first half of 2024, some sellers remained active when prices dipped to €2,225/MT. During the latter half of the year, price ranges narrowed to €2,390–2,650/MT. Although prices rose toward the end of 2024 and into February 2025, increased seasonal supply and inventory recovery pushed prices down sharply during late February and March.
EU SMP exports were strong, accounting for 52% of total production in 2024 (717,783 MT). Key destinations included Algeria (165,422 MT), Egypt (53,512 MT), the Philippines (38,581 MT), and Saudi Arabia (32,792 MT). Only 205 MT of SMP were exported to the US, suggesting minimal direct exposure to US tariffs. However, indirect impacts may occur as EU exporters compete with the US for market share in Southeast Asia and China.
EU Forecasting Insight
There seems to be a high correlation between the EU and US skimmed milk powder. Therefore, any significant increase or decrease in either price will likely also happen in the other. Thus, they can both be used as a soft proxy for the trend of each other. The finer moves are still independent, but the highs and lows tend to happen around the same time and to the same degree.
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