With no Global Dairy Trade (GDT) auction this week or last week, the European spot market is our main guide for dairy markets.

Butter prices took a lift this week, rising by €70/t to hit €5,890/t, which is just shy of the 18-month peak.

To put it in context, this time last year, butter prices were at €4,570/t and would remain in or around at that level until September.

Whole milk powder (WMP) prices have remained more or less unchanged this week at €3,625/t.

WMP prices have been more volatile over the last few months, but are still about €300/t higher than this time last year.

Cheddar cheese prices fell by €70/t on the spot market this week, while skim milk powder (SMP) fell more sharply by €65/t.

The GDT did hold a pulse auction earlier this week, in which SMP prices fell by €47/t. At the same auction, WMP remained more or less the same, so skim doesn’t seem to be in demand at present.

The quantities sold at these pulse auctions is small, with about 470t for both types of powder. It’s probably more of an indication as to where the floor is in the market than anything else.

Milk supply in New Zealand is expected to be well back on previous years for March, with some expecting it to be the lowest since March 2020.

This will counter the increase in production in February and put another dent in global supply. With feed prices falling across Europe, expect to see some supply bounces in countries such as Germany.