A flat Global Dairy Trade (GDT) auction on Tuesday didn’t deter the European spot market prices from continuing their upward curve this week.

There was further gains for butter, whole milk powder (WMP) and skim milk powder (SMP) in Europe.

Butter increased by €90/t to hit €5,975/t while WMP and SMP increased by €40/t and €15/t respectively.

At the GDT, the overall index increased by just 0.1%, but WMP increased by 0.4% and SMP was the same price as the last auction.

By far the biggest change was for cheese prices, with cheddar dropping in price by 8.5% compared with the last auction to hit €3,729/t, which is now well below the European price for cheddar at €4,025/t.

The amount of product traded was just over 17,000t and is the lowest level since May 2020 and an indicator of where demand is at.

Of course, global supplies are also back and the latest from the Netherlands is that milk supply for March 2024 is back 1.3% compared with March 2023.

Wet weather has also hampered the sowing of crops and slurry tanks are full with nowhere to go, so the likelihood is for less milk from the Netherlands over the coming months, on top of less milk from Ireland, Germany, etc.

In any other year, the reduction in supply would be driving the market crazy, but demand continues to weigh on the market. We heard some predictions from Irish co-op CEOs this week that they expect the second half of the year to deliver higher prices as the reduction in supply really bites.