Commodity dairy prices have a taken a shift upwards again this week.

The recent positive GDT result is reaffirming dairy commodity buyers that even with milk supply in New Zealand gathering pace, the demand is still there.

In the main, Irish milk processors held fire on increasing August farmgate milk price this week.

There was an expectation that milk processors would increase August milk price in line with the GDT bounce and commodity prices rising.

Skim milk powder, whole milk powder and butter continue to rally about 20% ahead of prices for the same time last year.

Cheddar prices have taken a significant lift over the last couple of weeks and look like they are staying at that slightly higher level of €3,260/t.

On the supply side, US milk has slowed down relative to the same period last year.

In May, milk supplies had been running 4.5% ahead, but the most recent statistics show that milk supply was 2% ahead by the end of July. Yes, it’s still 2% ahead and any percentage of a large volume is big.

The July number was 8.68bn kg and the same number for July 2020 was 8.5bn kg. The US is a big player, but despite the volume increases, it still doesn’t seem to be having a dampening effect on global demand.

The other big player, New Zealand, a country that probably has more of an impact on global markets, will hit peak supply in about two weeks.

With record milk prices, it is likely to be a good year for milk, but a lot depends on the weather over the next two to three months.