A recovery in farmgate milk prices this year is not evident from future prices for dairy commodities.John Lancaster of StoneX, the commodity trading services company, pointed out that future dairy prices for the fourth quarter of this year have fallen by 9% to 14% since late May.
A recovery in farmgate milk prices this year is not evident from future prices for dairy commodities.
John Lancaster of StoneX, the commodity trading services company, pointed out that future dairy prices for the fourth quarter of this year have fallen by 9% to 14% since late May.
The fourth quarter 2023 forward price for skim milk powder (SMP) in late May was €2,860/t; it has now fallen to €2,500/t. This is a drop of €360/t or 14%.
Similar falls have been seen in forward prices for butter for the fourth quarter of this year. Forward prices have dropped since May from €5,100/t to €4,670/t. This reduction of €430/t equates to a 9% fall.
A 10% drop in forward prices since May has been recorded for cheddar cheese, with fourth quarter positions falling from €4,300/t to €3,900-3,850/t.
Inflation
Anecdotal evidence suggests that inflation has hit demand, with a definite flight to retailers’ own-brands confirming that consumers are moving down the value chain, Lancaster said.
Meanwhile, Dutch spot prices for SMP are hovering around €2,330/t; back from €2,500/t in June, and from a high of €4,190/t in April last year.
Butter is on €4,620/t. It was on €4,780/t in early June, and hit a high of €7,255/t in April 2022.
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