Just prior to Christmas, there was a slight recovery in EU skim milk powder (SMP) and butter prices. Around the same time, there was a deep fall in Dutch spot milk prices, which normally coincides with the Christmas holidays as nobody has any real interest in buying more product from spot markets over the holiday period.

Autumn EU milk deliveries continued to increase and the latest stats show October supplies up 3.9% compared with the same month in 2014. Surprisingly, the continued autumn milk supply increase has prompted the large Dutch processor Friesland Campina to offer a bonus if suppliers reduce or at least hold the same delivery they had in December for the first six weeks of 2016.

They have short-term processing capacity issues given the large increases in autumn supply.

Some estimates of Chinese import figures suggest they have turned a corner and some September to December import figures are suggesting the volume of product into China has increased considerably.

EU dairy quotations pushed up again because of a stronger euro and while US butter and cheese prices have come back, they are still at relatively high levels.

Closer to home, Dairy Crest has finally exited the UK dairy sector with the completion of its sale to Germany’s Müller Group after a year-long competition authority review.

Chief executive Mark Allen is reported to believe milk production is better off in the hands of co-operatives or private companies rather than publicly quoted companies. Müller chief executive Ronald Kers suggests further consolidation of the UK fresh milk sector is required. Recently they have invested about £45m into capacity of demineralised whey, which it will sell to Fonterra under a five-year contract.