As we move into November, the dairy complex sits at a seasonal crossroads: Northern Hemisphere milk output is past its peak, while Southern Hemisphere production — particularly in New Zealand — reaches full flow. Trade patterns, feed costs, and macroeconomic sentiment all start to influence price direction heading into year-end.
🧠Key Themes to Watch
1. Southern Hemisphere Peak Milk & Export Dynamics
- New Zealand production typically peaks in October–November, and any weather deviation (rainfall, pasture quality, heat stress) can shift exportable volumes sharply.
- Track Fonterra’s Global Dairy Trade (GDT) auctions — pricing signals for Whole Milk Powder (WMP) and Skim Milk Powder (SMP) often set the tone for global sentiment.
- Keep an eye on China’s import activity, especially if state buyers re-enter the market for early-2026 coverage.
2. Northern Hemisphere Seasonal Slowdown
- In Europe, milk flows are contracting while processors balance cream vs. powder output. Butter inventories remain comfortable, but SMP stocks have thinned.
- US milk production is steady, yet margins are tightening under higher feed and energy costs. CME spot prices will show short-term demand shifts.
3. Demand Trends into Year-End
- Retail and foodservice demand usually rise in Q4. Cheese and butter demand benefit from festive consumption in Europe and North America.
- Export logistics can tighten — higher freight costs and vessel congestion are common.
- FX moves (EUR/USD, USD/NZD) will affect competitiveness of export offers.
4. Feed, Energy & Macro Inputs
- Feed markets: Corn and soymeal volatility continues; milk-to-feed ratios will guide margin pressure.
- Energy costs: Natural gas and diesel prices directly impact drying and logistics costs for powders and whey.
- Macro sentiment: Interest-rate expectations, consumer confidence, and freight rates shape risk appetite across agri-commodities.
📊 Indicators & Data Sources to Monitor
| Category | Source | Focus |
|---|---|---|
| Global Prices | Global Dairy Trade (GDT) | Fortnightly auction results for WMP, SMP, butter, AMF |
| US Market | CME Dairy Futures & Spot Prices | Class III/IV milk, cheese, butter, whey trends |
| EU Data | European Milk Market Observatory (MMO) | Milk collection, product prices, margin indicators |
| NZ Supply | Fonterra & DairyNZ Updates | Seasonal production and export updates |
| Trade Flows | EU Export Data (DG AGRI) / UN Comtrade | SMP, butterfat and cheese export volumes |
| Macro Context | FAO Dairy Price Index | Global dairy price benchmark movements |
🧩 Yaribu View
November sets up a divergence phase:
Northern processors manage tightening milk supply, while Oceania tests export demand resilience.
A softer dollar could underpin global commodity prices, but consumer affordability remains a constraint.
Key focus areas:
- Whether China restocks ahead of Q1 2026
- If EU cream and butterfat prices stabilize
- Whether GDT auction strength continues
Transparency in data and flow-based analytics remain central.
Tracking real-time trade, weather, and production curves provides the clearest view of where dairy markets are heading into the first quarter of 2026.