On global dairy markets, milk powder prices appear to be worst affected by the global coronavirus outbreak. In both Europe and New Zealand, milk powder prices have seen the sharpest fall in recent weeks. The collapse in oil prices is undoubtedly also fuelling this.

On Tuesday this week, the latest GDT auction in New Zealand saw average dairy prices fall almost 4%. It’s the fourth GDT auction in a row that average dairy commodity prices have fallen. However, there was a mix of results across the product range, with milk prices falling but dairy fat prices actually rising.

The price of whole milk powder (WMP), which is the key commodity traded on the GDT, fell sharply by more than 4% on Tuesday to just under $2,800/t (€2,550/t). At the same time, the price of skimmed milk powder (SMP) plunged more than 8% in a single auction to just under $2,530/t (€2,300/t).

While milk powder prices were falling, the price of dairy fats actually increased at Tuesday’s GDT auction. Cheddar cheese prices increased almost 3% to $4,400/t (€4,000/t), while butter prices showed a marginal gain (+0.3%) to reach $4,145/t (€3,775/t).

The price of anhydrous milk fat increased 1% to $4,330/t (€3,950/t).

Closer to home in Europe, milk powder prices fell sharply this week. SMP prices plunged €320/t and are back to €2,050/t, while WMP prices plummeted more than €700 to fall back to €2,230/t. On butter and cheese markets, prices are coming under some downward pressure, but soaring demand from supermarkets is helping to hold prices as they are right now.