On the trade front, dairy exports rose from Australia, the EU and the US, offsetting a notable decline in New Zealand shipments. European export growth was largely driven by skim milk powder, while US exports benefited from a sustained surge in cheese volumes, especially to Mexico and Asia. Australia also strengthened its export position, with higher cheese and powder shipments to Southeast Asia.

In contrast, global dairy import demand weakened. Latin America, Asia (excluding China), the Middle East & Africa, and China all recorded month-on-month declines. Reduced cheese imports by Brazil, lower SMP demand in parts of Asia, and a sharp drop in fluid milk product imports by the United Arab Emirates were key drivers of this contraction. Despite this, cumulative imports over the past twelve months remain positive in several regions, indicating underlying resilience.

Fonterra’s own milk collections reflected the broader production trend. New Zealand collections in December rose 2.5% year-on-year, while Australian collections increased 6.8%, supported by improved seasonal conditions. Meanwhile, Global Dairy Trade prices showed modest recovery at the January auction, although prices remain below year-earlier levels, reflecting ample supply and cautious demand.