In Q1 2026, SMP markets strengthened across major regions, though the drivers varied. Asia saw firmer sentiment as Oceania export availability tightened and North Asian buying supported nearby shipments, while Southeast Asian buyers remained active but selective. Europe moved upward as sellers reported stronger routine business and buyers focused on prompt coverage, with production meeting current demand but not creating excess supply. North America also firmed as nonfat dry milk availability stayed tight in parts of the quarter, despite steady milk production, because processors directed milk solids toward higher-protein dairy products. The Iran war did not directly affect raw milk supply, but it raised freight, fuel, drying, and packaging risks. Chemical container exports from the US Gulf Coast rose 12.0% in March, while 20.0% surge capacity was available for disruptions, showing broader logistics stress.
Analyst Insight
According to Procurement Resource, near-term SMP trends may stay firm if export demand remains active and freight costs stay elevated.
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Skim Milk Powder prices followed a broadly mixed trajectory during the second half of 2025. Through the third quarter, prices initially held at supported levels, benefiting from constrained output in Oceania during the Southern Hemisphere winter and seasonal production dips in the United States. Limited export availability from New Zealand provided near-term tightness, keeping prices relatively firm against the backdrop of softer broader dairy market conditions. Demand from import-dependent markets, however, remained subdued, with Southeast Asian buyers showing cautious procurement behaviour and reduced purchasing activity.
As the quarter drew close, supply conditions shifted materially. Milk production accelerated across multiple major exporting regions simultaneously, including New Zealand, South America, and Europe, channelling significantly greater volumes toward powder manufacturing. This increase in production translated into rising stock levels and downward price pressure entering the fourth quarter. Global auction results reflected this deterioration progressively, with successive declines recorded across key price indices. Buyer participation weakened as importers drew on existing inventories and adopted a measured, needs-based procurement approach. Skim milk powder demonstrated relative resilience compared to other dairy commodities, holding largely stable in certain auction events even as broader dairy prices declined.
Analyst Insight
According to Procurement Resource, skim milk powder prices are expected to remain range bound in the near term, with ample global supply continuing to limit meaningful upside.
Skim Milk Powder or skimmed milk powder is extracted by eliminating water from pasteurised skim milk (fat-free milk). It is made up of 5% or less moisture (by weight) and 1.5% or less milkfat (by weight) along with a minimum milk protein content of around 34%. Skim Milk Powder has been categorised for use as an ingredient based on the heat treatment process utilised during its manufacture.
Confectionaries, Baby food, Bakery, Chocolates, Cream Cheese
Powdered milk, Dried milk, Non-fat dry milk
Arla Foods Amba, Dairy Farmers of America Inc, Nestlé SA, Danone S.A, Westland Milk Products
CurrencyUS$ (Data can also be provided in local currency)
Supplier Database AvailabilityYes
Customization ScopeThe report can be customized as per the requirements of the customer
Post-Sale Analyst Support360-degree analyst support after report delivery
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In this process, pasteurised non-fat skimmed milk is concentrated in an evaporator, reducing the content to almost 50% milk solids. The concentrated milk obtained in the previous step is then sprayed into a heated chamber, almost instantly evaporating the water content and leaving behind fine powdered particles of milk solids.
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This report provides an extensive cost evaluation of Milk Chocolate production via conching and tempering processes.
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