If Irish dairy farmers and co-ops believe our domestic milk production doesn’t have an impact on dairy markets then this is the week to dispel that myth. The extremely difficult weather conditions, which have contributed to a fodder shortage across the country, have precipitated a significant shift in dairy market sentiment over the last week.
Ireland is Europe’s third-largest butter producer behind Germany and France, and bigger than some of Europe’s dairy heavyweights like the UK, Netherlands and Poland. As the bad weather and low temperatures dragged on here over recent weeks, butter prices have risen in accordance. Ireland’s growing milk pool is giving us an increasingly important say in market sentiment.
Last week, when fodder shortages were declared to be at crisis levels, butter prices across Europe shot up by €300/t to reach highs of €5,200/t – the highest since last October. On dairy futures markets, butter prices look strong through to the end of the summer with July, August and September prices trading between €5,800/t and €5,900/t.
Cheese markets have also lifted in the last week. Cheddar prices are steady at €3,200/t but mozzarella and gouda prices have jumped to €2,900/t and €2,700/t respectively. The price of whole milk powder (WMP) increased slightly in the last week close to €2,800/t. Even prices for skimmed milk powder (SMP) rose slightly this week on spot markets to €1,300/t, although this is still below intervention levels.
Dairy markets: butter markets rising again as stocks remain tight