Executive Summary

The global Anhydrous Milkfat (AMF) market demonstrated mixed pricing behavior during the quarter ending September 2025, shaped by diverging cost structures, evolving demand patterns, and regional supply fundamentals. While North America and APAC experienced price stability, Europe—particularly Germany—recorded a quarter-over-quarter increase, reflecting tighter raw milk availability and rising farm gate prices.

Across regions, macroeconomic indicators such as Producer Price Index (PPI), Consumer Price Index (CPI), industrial production, and retail sales played a crucial role in influencing production costs and downstream demand. This article provides a comprehensive regional analysis of Anhydrous Milkfat prices, covering cost drivers, demand dynamics, supply conditions, and price forecasts for North America, APAC, and Europe.

Introduction: Understanding Anhydrous Milkfat Market Dynamics

Anhydrous Milkfat is a high-purity dairy fat widely used in bakery, confectionery, infant nutrition, processed foods, and industrial dairy formulations. Its pricing is closely linked to raw milk availability, dairy feed costs, energy prices, labor inflation, and consumer demand trends.

In Q3 2025, the AMF market was characterized by:

• Stabilizing milk supplies in some regions
• Volatile energy and utility costs
• Contrasting macroeconomic performance across major economies
• Shifting consumer preferences toward premium dairy fats

Global Anhydrous Milkfat Price Overview – Q3 2025

Globally, Anhydrous Milkfat prices remained broadly range-bound, as cost pressures from energy and inflation were partially offset by improved milk availability and inventory expansion. While Europe faced upward price momentum, North America and China maintained price stability, supported by balanced supply-demand fundamentals.

Key global themes included:

• Energy price volatility influencing processing margins
• Diverging milk production trends across regions
• Strong food-sector demand counterbalanced by weaker industrial activity
• Cautious procurement behavior amid uncertain macroeconomic signals

North America Anhydrous Milkfat Prices – Q3 2025

United States Price Trend Overview

In the United States, the Anhydrous Milkfat Price Index remained stable quarter-over-quarter in Q3 2025, reflecting mixed market signals. Despite rising production costs, ample milk availability and expanding inventories helped contain price escalation.

Production Cost and Inflationary Pressures

AMF production costs in the U.S. increased during Q3 2025, primarily due to:

• A 2.6% year-over-year increase in Producer Price Index (PPI) in August 2025
• Spikes in natural gas prices, elevating energy-intensive dairy processing costs
• General inflation, with CPI reaching 3.0% YoY in September 2025, increasing labor, logistics, and packaging expenses

However, these upward pressures were partially offset by lower feedstock costs.

Milk Feedstock and Supply Conditions

Milk feedstock costs softened in Q3 2025, driven by:

• Increased raw milk supplies
• Lower dairy farmer feed costs
• Favorable weather conditions in major milk-producing states

Notably, U.S. milk production surged throughout Q3 2025, leading to:

• Expanded domestic dairy inventories
• Increased global dairy exports
• Improved availability of cream and butterfat for AMF production

This surplus supply played a crucial role in preventing price increases.

Demand-Side Analysis

Demand for Anhydrous Milkfat in the U.S. remained moderately supportive, influenced by:

• Retail sales growth of 5.42% YoY in September 2025
• A stable labor market with 4.3% unemployment
• Consistent demand from bakery, processed food, and foodservice sectors

However, consumer confidence declined to 94.2 in September 2025, signaling caution toward discretionary food spending, particularly premium dairy products.

Industrial and Manufacturing Indicators

Industrial demand remained subdued:

• Industrial production grew only 0.1% YoY in September 2025
• Sluggish manufacturing activity limited bulk industrial AMF consumption

North America Price Outlook

The Anhydrous Milkfat price forecast for North America suggests continued stability, supported by:

• Abundant milk supply
• Balanced retail demand
• Contained procurement activity amid cautious consumer sentiment

APAC Anhydrous Milkfat Prices – Q3 2025

China Price Trend Overview

In China, the Anhydrous Milkfat Price Index remained stable quarter-over-quarter in Q3 2025, reflecting balanced cost and demand dynamics amid mixed macroeconomic signals.

Production Cost Trends

Production costs for Anhydrous Milkfat declined in Q3 2025, driven by:

• Lower farmgate milk prices
• Stable dairy feed costs
• Improved operational efficiencies in large-scale dairy processing

Additionally:

• CPI rose marginally by 0.1% in September 2025
• PPI declined by 2.5%, easing upstream manufacturing cost pressures

These factors contributed to a more favorable cost environment for AMF producers.

Demand Dynamics and Food Sector Growth

Demand for Anhydrous Milkfat in China remained robust, supported by:

• Strong B2B demand from food manufacturers
• Growing consumer preference for premium dairy and natural fat-based products
• Expanding bakery, confectionery, and infant nutrition segments

Retail momentum was evident, with retail sales increasing 4.5% in September 2025, boosting consumption of AMF-containing food products.

Industrial Production and Macroeconomic Indicators

China’s industrial production expanded by 6.5% in September 2025, signaling:

• Strong downstream food and beverage manufacturing activity
• Higher usage of dairy ingredients, including AMF

Milk Supply and Raw Material Availability

Domestic raw milk production declined in Q3 2025, tightening local feedstock availability. However:

• Global milk supply was projected to increase in H2 2025
• Imports helped bridge domestic supply gaps

This balance prevented significant price volatility.

APAC Price Outlook

The Anhydrous Milkfat price forecast for APAC indicates continued price stability, as:

• Strong demand offsets declining production costs
• Global supply availability supports market balance

Europe Anhydrous Milkfat Prices – Q3 2025

Germany Price Trend Overview

In Germany, the Anhydrous Milkfat Price Index rose quarter-over-quarter in Q3 2025, marking a contrast to stable trends in other regions. The price increase was primarily driven by rising farm gate milk prices and tighter raw milk availability.

Production Cost Pressures

Anhydrous Milkfat production costs in Germany increased due to:

• Rising EU farm gate milk prices during August and September 2025
• Elevated energy costs for food processing, particularly electricity and natural gas
• Despite a 1.7% decline in PPI in September 2025, energy expenses remained high

These factors significantly squeezed processing margins.

Milk Collection and Supply Constraints

German milk collection declined from January to July 2025, reducing:

• Cream availability
• Butterfat extraction volumes
• Operational flexibility for AMF producers

This structural supply constraint was a key contributor to rising prices.

Demand Patterns Across End-Use Sectors

Demand for Anhydrous Milkfat strengthened in:

• Bakery and confectionery sectors
• Premium food applications favoring natural dairy fats over substitutes

However, overall demand faced headwinds from broader economic weakness.

Industrial and Macroeconomic Challenges

Industrial demand softened:

• Industrial production declined by 1.0% in September 2025
• Manufacturing activity contracted, reducing industrial dairy ingredient usage

Additionally, CPI rose by 2.4% in September 2025, impacting consumer purchasing power and discretionary food consumption.

Europe Price Outlook

The European Anhydrous Milkfat price outlook remains cautiously firm, with:

• Continued pressure from milk supply constraints
• Energy cost volatility
• Demand resilience in premium food segments

Procurement Strategy and Market Outlook

Key Procurement Considerations

Buyers across regions adopted cautious procurement strategies in Q3 2025, focusing on:

• Short-term contracts
• Inventory optimization
• Cost risk mitigation amid uncertain macroeconomic conditions

Overall Anhydrous Milkfat Market Outlook

Looking ahead, the Anhydrous Milkfat market is expected to remain:

• Stable in North America and APAC
• Firm in Europe, subject to raw milk availability and energy prices

Key variables to watch include:

• Milk production trends
• Energy cost movements
• Consumer demand recovery
• Industrial manufacturing performance

Conclusion

The Anhydrous Milkfat price landscape in Q3 2025 reflects a complex interplay of supply fundamentals, cost pressures, and demand resilience across regions. While North America and APAC maintained price stability, Europe experienced upward momentum driven by structural supply constraints. 

Get Real time Prices for Anhydrous Milkfat (AMF): https://www.chemanalyst.com/Pricing-data/anhydrous-milkfat-2317