For the Quarter Ending September 2025
North America
• In the United States, the Lactose Price Index fell quarter-over-quarter in Q3 2025, driven by downward revised milk prices.
• Lactose production costs were mixed, with lower milk prices offsetting general inflation (CPI 3.0% Sep 2025).
• Producer input costs were impacted by a 2.6% PPI increase in August 2025, despite favorable feed prices.
• Lactose demand outlook was mixed, supported by strong retail sales growth of 5.42% in September 2025.
• Sluggish industrial production growth of 0.1% in September 2025 limited expansion in key manufacturing sectors.
• Robust US milk production, surging in July and August 2025, contributed to ample Lactose supply.
• Dairy product inventories remained firm in September 2025, with skim-solids based stocks projected to grow.
• Declining consumer confidence to 94.2 in September 2025 suggested caution in discretionary spending.
• A low unemployment rate of 4.3% in September 2025 supported overall consumer purchasing power.
Why did the price of Lactose change in September 2025 in North America?
• Downward revised milk prices for Class III and IV reduced raw material costs.
• Robust US milk production, surging in July and August 2025, increased overall supply.
• Mixed demand signals, including strong retail sales (5.42% in September 2025), influenced market.
APAC
• In China, the Lactose Price Index fell quarter-over-quarter, driven by weak consumer demand and declining producer prices in September 2025.
• Lactose production costs trended lower in Q3 2025, influenced by low raw milk prices and decreased fodder prices in July 2025.
• Subdued consumer sentiment and weak dairy product consumption in Q3 2025 impacted overall Lactose demand.
• The Manufacturing Index was contracting in September 2025, signaling reduced industrial activity and lower demand for raw materials.
• Industrial production expanded by 6.5% year-over-year in September 2025, supporting demand for Lactose in manufacturing applications.
• Retail sales grew by 3.0% year-over-year in September 2025, yet consumer confidence at 89.6 remained low.
• Oversupply of raw milk persisted into Q3 2025, with whey and Skim Milk Powder imports declining through September 2025.
• The pharmaceutical market in China experienced rapid growth in 2025, providing a bullish signal for pharmaceutical-grade Lactose demand.
• Lactose price forecast remains pressured by persistent raw milk oversupply and a Producer Price Index decline of -2.3% in September 2025.
Why did the price of Lactose change in September 2025 in APAC?
• Weak consumer demand, with CPI at -0.3% and consumer confidence at 89.6 in September 2025, pressured Lactose prices.
• Declining PPI of -2.3% in September 2025 and low raw milk prices reduced production costs, contributing to lower Lactose prices.
• A contracting Manufacturing Index in September 2025 indicated reduced industrial activity, impacting overall Lactose demand.
Europe
• In Germany, the Lactose Price Index rose quarter-over-quarter in Q3 2025, driven by very high farm gate milk prices.
• Lactose production costs remained elevated in Q3 2025 due to very high farm gate milk prices and high industrial electricity costs.
• The Lactose Price Forecast indicates stability, supported by persistent demand in specific consumer sectors.
• Demand for infant milk formula and animal feed strengthened in Germany during Q3 2025.
• Germany's Manufacturing Index contracted in Q3 2025, and industrial production declined 1.0% in September 2025.
• Consumer Price Index increased 2.4% in September 2025, indicating rising general costs for raw materials.
• Producer Price Index decreased 1.7% in September 2025, mainly due to lower energy prices, partially easing cost pressures.
• The unemployment rate remained stable at 6.3% in September 2025, underpinning consistent consumer purchasing power.
• Retail sales in Germany rose modestly by 0.2% in September 2025, supporting consumer-facing lactose applications.
Why did the price of Lactose change in September 2025 in Europe?
• Very high farm gate milk prices in Q3 2025 significantly increased Lactose production costs.
• Rising Consumer Price Index by 2.4% in September 2025 contributed to higher overall input expenses.
• Strengthening demand for infant formula and animal feed supported Lactose prices despite industrial slowdown.
