Nonfat dry milk soars

ZISK
Mar 30
1 min read

In mid-March, nonfat dry milk (NFDM) hit $1.87 per pound on the CME spot market which was the highest daily price we’ve seen since June 2022. What makes it even more amazing is that the market was at $1.175 at the start of January and the March futures were around $1.16, and we’ve pushed U.S. prices to a huge premium against the other major exporters. This rally is massive and unexpected, especially when you factor in milk production which is still growing about 3% in January/February. What the heck has happened?

December when dairy markets were collapsing and it was looking like we were in for a very weak first quarter, I wrote an article about the bright spots in the dairy world, primarily focusing on the demand for high-protein dairy products. Prices for whey protein concentrate and whey protein isolates have been hitting new record highs for the past year, and we’ve seen growing demand for cottage cheese and high-protein dairy beverages. It seemed all of this demand was for high-protein products, not lowly NFDM, which is about 33% to 36% protein. And that still appears to be the case; it doesn’t look like this rally is being driven by some sudden improvement in NFDM demand. Instead, it looks like the demand for high-protein products is reducing the amount of skim solids left over to make NDFM and the resulting tighter-than-expected supply has caught the market off guard.

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