US dairy farmers continue to increase milk production at a very healthy rate. For the month of June, US milk production stood at 7.9bn litres, which is a 1.6% increase compared with the same month last year. This brings US milk production for the first six months of 2017 to 47.7bn litres, which is 1.5%, or 700m litres, ahead of last year.

On the demand side, the world’s most important market for dairy commodity imports continues to show positive signs. Chinese dairy imports for the month of June increased sharply across all the major product categories.

Imports of whole milk powder (WMP), in particular, increased very strongly year on year by 57% to close to 43,000t.

Chinese demand for whey powder remains very healthy this year, with June imports up 25% to more than 55,000t. Similarly, infant formula demand continues to accelerate at double-digit pace this year despite rising prices. Imported volumes for June stood at 26,000t, which is 45% more than the same month last year.

Imported volumes of cheese were up more than 50% to 12,260t, while Chinese butter imports were up by a third to close to 8,900t. In Europe, butter prices are beginning to stabilise around the €6,000/t mark, with the holiday season dampening demand.

Dutch prices for WMP moved above the €3,000/t mark this week, but skimmed powder (SMP) remains very weak at €1,740/t and perilously close to the intervention price level.