European Union exports of skimmed milk powder are running at their fastest pace in seven years, underpinning a price rally that has lifted the powder to its highest since 2022.

But Egypt, the buyer that added most this year, cut its purchases sharply as prices climbed through the summer, while Indonesia kept buying.

The EU shipped about 538,000 tonnes of skimmed milk powder (SMP), the protein-rich powder dried from milk once the cream has been taken off for butter, to countries outside the bloc in January to July, Eurostat data showed. That was up 14 per cent from a year earlier and the most for the period since 2019.

The EU average was €2,300 to €2,900 in every month this year.

[explore products="040210" reporter="eu" flow="exports" region="non_eu" period="monthly" metric="quantity" view="chart" years="2019-2026" title="EU skimmed milk powder exports outside the bloc, monthly since 2019" subtitle="Tonnes, by destination (Eurostat). The June 2026 bar includes a 10,100-tonne Irish entry to Yemen that appears to be a quantity error"]

Egypt took 44,400 tonnes in the seven months, up 63 per cent. It had bought 6,400 to 8,500 tonnes a month from October to May, mostly from France and Germany, but its purchases fell to 4,500 tonnes in June and 2,400 tonnes in July, the smallest monthly volume since August 2023.

The drop came as prices rose. The average value of EU shipments to Egypt climbed from €2,180 a tonne in January to €2,873 in July. Egyptian purchases have dipped in midsummer before, to 1,900 tonnes in July 2023. Figures for August have not yet been published.

[explore products="040210" reporter="eu" flow="exports" partner="EG" period="monthly" metric="quantity" view="chart" years="2023-2026" title="EU skimmed milk powder exports to Egypt, monthly since 2023" subtitle="Tonnes (Eurostat). Shipments fell to 2,400 tonnes in July 2026, the least since August 2023"]

Wholesale SMP in France was quoted at €3,389 a tonne (about $3,800) in the week of 5 October, up 64 per cent from a year earlier and the highest since October 2022, European Commission data showed. German and Dutch prices were up 54 and 57 per cent respectively.

Food-grade powder rose a further €170 to €3,550 a tonne in the week to 14 October, CMB News reported.

A large dairy factory with a white drying tower and steel silos beyond a grass field under a clear blue sky

EXPORTS, NOT OUTPUT

It was exports, not lower output, that tightened the market. EU supplies of SMP "declined by a significant 20.2% year-on-year in Q2 2026", the Agriculture and Horticulture Development Board, the UK farm levy body, said on 24 September.

Production was flat while exports rose 22.2 per cent, with Egypt and Indonesia among the main contributors, it said.

The US Department of Agriculture's Foreign Agricultural Service had forecast in June that EU exports would fall 3.4 per cent this year. It attributed early-year price gains to "lower than originally anticipated global stocks of SMP and a lack of shipments from Iran (the world's fourth largest SMP exporter)", citing industry analysts.

Even after the rise, EU powder was quoted at $3,557 a tonne in mid-September, below $3,600 for powder from Oceania and $4,254 for US product, French farm publication Réussir reported.

INDONESIA KEEPS BUYING

EU shipments to Indonesia rose 40 per cent to 43,300 tonnes in January to July. They were at least 5,900 tonnes in every month from March, reaching 7,700 tonnes in July.

Indonesia's National Nutrition Agency (BGN) requires each kitchen in its free-meals programme to serve milk or a milk drink twice a week under Circular No. 10 of 2026. It counted 29,670 kitchens serving more than 63mn people in early June.

[explore products="040210" reporter="eu" flow="exports" partner="ID" period="monthly" metric="quantity" view="chart" years="2023-2026" title="EU skimmed milk powder exports to Indonesia, monthly since 2023" subtitle="Tonnes (Eurostat). At least 6,000 tonnes in every month since March 2026, 7,700 tonnes in July"]

"With such a huge need for milk, we are also somewhat overwhelmed," Gunalan, the agency's acting deputy for promotion and cooperation, said on 2 June. About 75 per cent of the country's milk needs are met by imports, according to the agriculture ministry.

The USDA's Jakarta office said last November, before the circular, that milk was not a mandatory part of the programme and that it did not expect significantly higher SMP imports.

It credited a 65 per cent rise in EU sales to Indonesia in January to August 2025 to "the relatively competitive price of European SMP compared with other suppliers".

Algeria, still the largest buyer, cut its purchases by 21 per cent to 56,600 tonnes, extending a fall from 114,200 tonnes in the same months of 2024. European suppliers took the lead in the SMP purchases that ONIL, Algeria's state milk-powder buyer, made for delivery from November to February, Dairynews reported in June, without giving volumes.

BUTTER GOES THE OTHER WAY

Butter, churned from the cream that SMP production leaves behind, has gone the other way. French butter was at €4,352 a tonne, 19 per cent below a year earlier, though 3 per cent above its January level.

The gap between butter and SMP prices has narrowed to €617 a tonne in Belgium and €630 in the Netherlands, from more than €3,000 a year earlier, the narrowest in Commission data going back to 2015.

[explore layer="prices" price="ds:99045,ds:99044" pperiod="365d" pto="2026-10-16" title="French wholesale prices of skimmed milk powder and butter" subtitle="Weekly, US dollars a kilogram, converted from euros (European Commission). SMP is at its highest since October 2022; butter is 19% below a year earlier"]

Dairy proteins, including SMP and whey, have been outperforming butterfat on consumer demand for protein-enriched foods, Rabobank said in its quarterly dairy outlook on 15 September. "Protein has become one of the strongest structural growth stories in global dairy markets," said Michael Harvey, a senior dairy analyst at the bank.

The shift is starting to reach farmers. Germany's raw-material value of milk, which the ife institute in Kiel calculates from butter and SMP prices, rose 10.1 per cent in September to 42.6 cents a kilogram, mainly on SMP, Top Agrar reported, citing the ZMB market reporting service.

That left it 1.9 cents below a year earlier, against a gap of 9.2 cents in August.

Dutch cooperative FrieslandCampina set its October guaranteed price at 45.5 cents a kilogram, and Lactalis Leerdammer, which pays 46.35 cents for October, values milk protein at €8.14 a kilogram, twice its price for fat, Dairynews reported.

[explore layer="prices" price="ds:99029,ds:99030" pperiod="365d" title="Belgian wholesale prices of skimmed milk powder and butter" subtitle="Weekly (European Commission). The butter–SMP gap of €617 a tonne is the narrowest in data back to 2015"]

In France, Lactalis set its October base price at €408.27 per 1,000 litres, up €8.27 from August and September, and Sodiaal raised its price to €405 from the €400 it had paid since April, Web-agri reported.

Jean-Michel Javelle, Sodiaal's president, expects milk collections in France and neighbouring countries to fall this winter, once this year's forage goes into rations. "That should boost commodity prices, and so the price of milk," he said.

BUYERS BALK

Buyers have already balked once. In the second half of September, European SMP export prices "moved lower at both ends of the range during the reporting period as buyer interest remained cautious following recent price increases", the USDA's Dairy Market News said.

Réussir wrote on 15 October that "the question of whether export demand holds up will nevertheless start to arise, given the prices reached".