FAO Dairy Price Index drops but milk powders and butters up

The United Nations’ FAO Dairy Price Index averaged 119.3 points in February, down 1.4 points (1.2%) from January and 28.4 points (19.2%) below its level a year earlier. The February decline extends the downward trend that began in July 2025. The easing was mainly driven by a continued decline in cheese prices, particularly in the European Union, driven by improved milk availability, softer demand from key export markets, and intensified international competition.

By contrast, international quotations for both skim milk and whole milk powders increased notably, supported by a pick-up in import demand, particularly from North Africa, the Near East and Southeast Asia, alongside a seasonal slowdown in milk supply growth in New Zealand.

World butter prices registered their first monthly rise since reaching an all-time high in June 2025, underpinned by firmer international demand and tightening supply growth prospects in Oceania, although the increases were capped by softer quotations in the European Union amid ample cream availability.