Milk Powder (SMP)

Skimmed Milk Powder (SMP) is produced by removing water and fat from pasteurized milk, yielding a shelf-stable protein ingredient with less than 1.5% fat. It is used in reconstituted milk, bakery products, confectionery, and infant formula. New Zealand's GDT auction is the key price discovery mechanism.

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Quick Facts

Milk Powder (SMP) at a Glance

Common Origins
New ZealandEuropean UnionUnited StatesAustraliaBelarus
Common Destinations
ChinaSoutheast AsiaMiddle EastAfricaMexico
Grades & Specifications
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INCOTERMS
CIFCFRFOB
Unit of Measure
Metric Tons
Price Drivers

What Moves Milk Powder (SMP) Pricing

Skim milk powder prices via the GDT (Global Dairy Trade) auction held bi-weekly — Fonterra (NZ) is the dominant seller. EEX (European Energy Exchange) SMP futures provide forward price discovery for European-origin powder. Chinese infant formula demand, Algerian state tenders, and Mexican state buyer (Liconsa) decisions move global pricing. EU intervention stocks have historically capped European SMP.

Contract Structure

How Milk Powder (SMP) Cargoes Are Priced and Settled

Cargoes: 25 kg bags in 20-tonne or 25-tonne container loads. Pricing per metric tonne against GDT or EEX. Letter of credit standard for emerging-market buyers; open account for established Asian importers.

Quality & Disputes

Milk Powder (SMP) Specifications and Dispute Practice

Specs: protein min 34%, fat max 1.25%, moisture max 4%, scorched particles (Class A or B), bacterial count, antibiotics. Disputes turn on heat treatment classification (low-heat for cheese, medium-heat, high-heat for confectionery) and on antibiotic residue findings in destination testing.

Trade Flows

Where Milk Powder (SMP) Comes From and Where It Goes

Top exporters: New Zealand, EU (Germany, France, Netherlands, Belgium, Ireland), US. Top importers: China, Algeria, Indonesia, Mexico, Philippines, Vietnam. EU export refunds have been removed; competitiveness now depends on raw-milk pricing relative to NZ Farmgate Milk Price.

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Milk Powder (WMP)

Whole Milk Powder (WMP) retains the full cream content of milk (26-42% fat), offering a rich flavor profile for reconstitution into liquid milk, chocolate manufacturing, and bakery applications. New Zealand is the dominant global exporter, with Fonterra's production decisions significantly influencing global pricing.

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