This week’s GDT event in New Zealand saw a marginal decline of 0.4% for the average selling price of dairy commodities. However, the real story from the benchmark dairy price index was the contrasting fortunes of skimmed and whole milk powders.Following the European Commission’s recent decision to sell 100t of skimmed powder (SMP) out of intervention for a price of $2,070/t (€1,850/t), there were fresh doubts in the market around SMP and whether the EU was suddenly willing to offload stocks at these prices.
This week’s GDT event in New Zealand saw a marginal decline of 0.4% for the average selling price of dairy commodities. However, the real story from the benchmark dairy price index was the contrasting fortunes of skimmed and whole milk powders.
Following the European Commission’s recent decision to sell 100t of skimmed powder (SMP) out of intervention for a price of $2,070/t (€1,850/t), there were fresh doubts in the market around SMP and whether the EU was suddenly willing to offload stocks at these prices.
The market uncertainty appears to have affected buyers at this week’s GDT auction, with SMP prices falling almost 5% in price to $2,090/t. With SMP accounting for about a quarter of product sold on the GDT, the decline in price served to drag the entire index lower.
In contrast, whole milk powder (WMP) prices increased almost 3% to move above $3,100/t. After a blip in March, the market for WMP has been steady in recent months. The inflation in butter prices seen over recent weeks appears to be easing. At this week’s GDT, butter prices remain unchanged at $5,775/t following months of consecutive price rises.
Closer to home, the spot price of butter in Europe was steady last week at €6,100/t ($6,920/t). This was helped by comments from ECB president Mario Draghi, which saw a hardening of the euro against the US dollar last week. The exchange rate movement makes US butter more competitive in Europe.
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