Episode 134 – Protein powers the market
Skim milk powder has long been the by-product of the dairy world, but strong global demand for protein has turned it into one of the main drivers of the market. Anne Lee speaks with HighGround Dairy’s Stu Davison about the forces behind the latest Global Dairy Trade jump of more than 4%. They cover skim milk powder prices topping US$4000/t for the first time since 2022, and why milkfat prices are falling while powders are rising.
Host:
- Anne Lee, Senior Journalist, Dairy Country
Guest:
- Stu Davison, HighGround Dairy
Stu explains how GLP-1 weight-loss drugs, protein-enhanced foods and the shift towards milk protein concentrate and ultra-filtered milk have tightened global skim supplies. He also explains why the Middle East bought its largest GDT volumes since 2012. Speaking from Singapore after visits to Indonesia and China, he shares what he saw on the ground: falling milk production in China, cautious Chinese consumers, and new desert dairy farms in Inner Mongolia and Algeria that New Zealand will have to compete with. Anne and Stu also discuss Europe’s surprisingly resilient milk supply, the growing stocks of butter, and milk price futures trading above $10/kgMS. Stu explains the role of the weak Kiwi dollar and the risk to prices if El Niño doesn’t cut milk supply as much as the market expects. He also makes the case for a disciplined hedging policy over trying to pick the market.
