There is no doubt now but that dairy markets are moving upwards. Trends are very definitely upwards for butter and cheese.

Large Dutch processor Friesland Campina released a statement explaining it was going to increase the sales price for cheese and that it had been paying an ‘irresponsibly’ low milk price to Dutch farmers for months.

UK report

In the UK Glanbia will deliver the first farmer price increase for July (0.5 p/litre) since Spring 2015 (over 15 months ago). This is on top of not delivering a 0.5 p/litre cut on June supplies.

National UK deliveries are lower than last year. Also in the UK some new contracts are being offered with some farmers around the Manchester area offered multiple contracts in recent weeks as milk processors look to secure supply.

Three weeks ago butter in the UK was trading at £2000 and now it’s up over £300 with prices between £2,300 and £2,400. Spot milk prices was 15 to 16p/litre and now it’s closer to 20p/litre.

EU

Supply estimates from France and Germany suggest volumes are on par with 2015 despite having been ahead for much of the Spring. Forecasts from the EU suggest April to December supplies will be back 0.4% compared to 2015. Last week we reported Irish May supplies were between 5 and 10% ahead of 2015 supplies.

US

Farmers in parts of the US are being offered forward contracts in excess of $16/cwt (32.1 c/litre) for milk supplied between July and December with current prices are $13 /cwt (26/1 c/l). Much of the increase is on the back of grain prices rising given poor harvesting conditions in parts of South America.

US block butter increased recently again and is now at $4,581 (£3,168/€4,026) which is up $63 on recent sales. US block cheese has fallen again however at $2,945 (£2,036/€2,588). Skim milk powder has strengthened on the back of the recent GDT increases and higher EU prices.