EU Whole Milk Powder: Resilience or retreat?

The EU’s whole milk powder (WMP) sector is now facing a convergence of structural and competitive pressures. While prices remain elevated compared to early 2023, recent trends suggest a possible turning point. At the same time, production is faltering across key EU member states, raising questions about long-term supply capacity. Exports are shrinking, internal trade patterns are shifting, and global competition, particularly from New Zealand, is intense in several shared markets. Against this backdrop, the role of WMP within the EU’s dairy industry appears to be evolving. Based on DCA Market Intelligence’s benchmarks, this report unpacks the data behind the developments in the EU’s WMP market.According to DCA Market Intelligence, whole milk powder (WMP) benchmarks closed at €4,235 per ton on July 15, reflecting an 11.15% increase compared to the same date in the previous year.During the summer months of 2024, WMP prices had risen rapidly from €3,820 to €4,365 per ton. Since then, prices have remained relatively stable with a slightly negative sentiment, as evidenced by a low coefficient of variation* (2.75%). Prices stayed well above year-earlier levels for much of the past twelve months, peaking at a 20.8% annual increase on January 7.However, the price gap has been narrowing in recent months, with more intense declines in the past weeks. This contrasts with a positive trend observed last year in the same period. If current trends persist, year-over-year declines may occur by September.WMP production is dropping in the EUIn the European Union, WMP production is reported under the broader category “milk and cream powders (MCP), excluding skim milk powder.” This category includes not only WMP but also partially skimmed milk powders and cream powders. Monthly MCP production data is not available for all countries, since Ireland and Poland do not disclose such figures. Therefore, this report analyzes the available data for each of the EU-6 countries to provide a general overview.Germany remains the EU’s largest MCP producer, with 132,530 tons produced in 2024, representing a modest year-over-year increase of 0.59%. However, production is declining in 2025. As of May, year-to-date (YTD) production had fallen 16.23% year-over-year to 51,540 tons. This reflects two simultaneous trends: the overall decline in milk production, down 1.76% as of May, and the increased allocation of milk for butter (5%) and SMP (5.9%) production.France, the second-largest producer, saw a slight annual decline of 0.93% in 2024, producing 110,970 tons of MCP. Early developments suggest a deeper contraction in 2025, with production falling 5.75% year-over-year to 47,690 tons by May. Notably, France also reported separate WMP production data, showing a decline of 3.47% to 71,040 tons in 2024. This means that WMP represented 64.02% of total MCP production.MCP production fell sharply in the Netherlands. In 2024, Dutch production reached 80,100 tons, down 5.99% year-over-year. As of April 2025, YTD production dropped even further, 33.15% year-over-year to 24,800 tons, marking the sharpest decline in MCP among the EU-6 countries.Despite the lack of available data for MCP production for Ireland, Italy, and Poland, Eurostat provided specific annual WMP production figures for those countries. Ireland recorded the sharpest year-over-year decline, with WMP production falling by 69.65% to 17,300 tons in 2024. Poland's production declined by 17.92% to 19,920 tons, while Italy saw a modest increase of 1.03%, reaching 5,880 tons.Based on available data for MCP and WMP, total estimated production for the EU-6 countries reached 326,770 tons in 2024, a 13.47% decline compared to the previous year. Ireland contributed the largest share to this annual reduction, declining by 39,700 tons out of a total of 50,860 tons in the EU-6. Although this estimate is not exhaustive, it clearly illustrates the downward trend in EU WMP production. These results align with estimates from the United States Department of Agriculture (USDA), reporting EU WMP production at 610,000 tons in 2024, a 4.69% year-over-year decline. The USDA forecasts a further 4.92% decrease in 2025, which would reduce WMP output to 580,000 tons.Limited milk supply fosters prioritization in dairy processingThe contraction in WMP production is, in turn, driven by constraints in raw milk availability. Between 2023 and 2024, EU milk output increased slightly by 0.61%, reaching 104.7 million tons.According to the European Commission, the dairy herd is expected to decline by 1.1% between 2023 and 2035, contributing to an estimated decline of 0.2% in the EU’s milk output.In response to this limited milk supply, the EU dairy industry has increasingly prioritized cheese production. In 2024, EU cow cheese production rose by 7.4% year-over-year to 9.8 million tons, highlighting the industry's shift toward higher-value products. Butter production has also been prioritized, with production increasing by 1.21% to 2.09 million in 2024. Additionally, early 2025 figures underscore the prioritization of butter production, which has increased by 1.07% year-over-year to 931,590 tons as of May.Falling domestic and international demandAs a net exporter of WMP and MCP, the European Union’s international trade dynamics offer useful insight into both global competitiveness and external demand.Under the Harmonized System, codes 040221 and 040229 cover unsweetened and sweetened milk and cream powders with a fat content above 1.5%, including WMP. According to the Comext database, the EU exported 208,448 tons of MCP in 2024, a 19.87% decline compared to the previous year. Much of this volume (96.8%) was unsweetened MCP, and it accounted for the sharpest decline. Key destinations included Oman, Kuwait, China, the United Kingdom (UK), and the Dominican Republic.Additionally, total MCP export value fell slightly by 16.45%, reaching €920.81 million in 2024. Export values grew in some key markets, particularly Oman (+4.5%) and Kuwait (+43.4%), partially offsetting reductions in China (−9.4%), the UK (−2.3%), and the Dominican Republic (−6.9%). Export prices increased by 4.3% year-over-year to €4,417 per ton, reflecting an elasticity of -4.66. This indicates that WMP is relatively sensitive to price changes and easily substituted by alternative products or sources, such as international competitors.New Zealand, the world’s leading WMP exporter, maintained a stable export profile. In 2024, its MCP exports rose slightly by 0.52%, totaling 1.37 million tons. China was its largest destination (28.2%), followed by Algeria (10.4%), the United Arab Emirates (6.7%), Indonesia (5.5%), and Malaysia (4.6%). New Zealand also exported significant volumes to Oman, the UK, and the Dominican Republic, highlighting overlapping export markets with the EU and competition.The reduced Chinese demand, driven by the oversupply of milk, ageing of the population, and price-sensitive consumers, played a major role in the reduced MCP demand in the world and the EU. In 2024, China’s MCP imports declined by 4.9% compared to the previous year to 409,000 tons. However, emerging markets in the Middle East offered a partial relief, while China remains the leading global importer.Partial developments in 2025 indicate improvements in China’s imports, which have risen by 1.58% over the previous year to 253,991 tons as of June. However, currency movements are also influencing trade dynamics. On July 21, the euro-dollar exchange rate closed at $0.8574 per euro, 6.65% higher than the previous year. A stronger euro makes EU exports more expensive on the global market, weakening the competitiveness of EU WMP in price-sensitive regions.Intra-EU TradeThe internal EU MCP market exchanges higher volumes than the international market, amounting to 248,204 tons valued at €916.13 million in 2024. While export volume declined by 6.5% over the previous year, export values declined further by 6.51%, driven by a decline in prices. Between 2023 and 2024, MCP export prices declined by 3% to €3,829 per ton.In 2024, WMP was directed primarily towards Germany (+0.56% year-over-year to 48,656 tons), Belgium (+20.47% to 40,254 tons), Italy (-17.7% to 27,435 tons), the Netherlands (-7.41% to 42,708 tons), and France (-17.4% to 21,065 tons).While counterintuitive, some of the major producers are also relevant importers. Often, these countries have specialized food industries that might import WMP to produce value-added products. For example, Germany, the Netherlands, and France are all major producers and exporters of infant formula, often involving the utilization of WMP. Additionally, countries like the Netherlands or Belgium act as nexus points for distribution, which contributes to their elevated import and export figures.Discussion and conclusionThe EU’s WMP sector continues to face structural and competitive pressures. While prices remained elevated for most of the past year, recent trends show a narrowing year-over-year gap. Additionally, more intensified weekly declines underscore a negative sentiment in 2025.WMP production is declining across major EU member states, driven by limited milk availability and the sector’s clear shift toward dairy products with a higher value. Germany, France, and the Netherlands all posted significant YTD declines in 2025. Ireland alone accounted for nearly 80% of the EU-6’s annual reduction in WMP output in 2024. Meanwhile, milk is increasingly allocated to cheese and butter production, both of which saw growth.Externally, EU WMP exports fell nearly 20% by volume in 2024. Declining Chinese imports, down 4.9%, played a central role. Furthermore, New Zealand remains a key competitor, which maintains stable volumes and more competitive pricing. Although early 2025 figures show signs of recovery in China, the long-term demand outlook remains fragile.A stronger euro has further weakened EU export competitiveness in 2025, especially in price-sensitive markets. Within the bloc, WMP trade remains a strong internal demand, underscoring the strong demand of the food industry.Altogether, these developments suggest the EU’s global presence in the WMP market is gradually diminishing. While domestic use provides a degree of resilience, the sector appears to indicate a subdued demand for 2025. Monitoring price movements and global benchmarks will be essential for processors and traders to remain competitive in the complex WMP market.*The coefficient of variation compares the spread of the standard deviation against the average. In this report, it measures the variability of prices, which is high when the value is higher than 10%Additional referencesEuropean Commission (2023). EU Agricultural Outlook 2023–2035 Eurostat (2025). Comext Database