European dairy markets stabilised this week for most commodities, especially butter.

After weeks of soaring prices, which saw the value of butter go up by a few hundred euro per tonne each week, prices this week increased by just €10/t. The futures market suggests that prices will remain for another while before falling in November.

There was more movement in the cheese market, where prices for cheddar increased by €85/t to reach €4,950/t while skim milk powder (SMP) increased by a very respectable €75/t and whole milk powder (WMP) increased by €50/t to reach €4,365/t.

For most of this year and for almost all of last year, WMP was making around €1,000/t less than this, so it’s a significant price increase.

I remember this time last year the price of WMP was tanking on the Global Dairy Trade (GDT) auction.

There was no GDT this week, but it seems that last week’s auction which saw the index fall by 0.4% had no contagion effect on European prices.

At the pulse auction this week, SMP went up by €118/t, while WMP fell by €119/t. With China having a surplus of WMP, the global market for that product is more limited.

The solid prices this week come despite the publication of the latest milk production data from New Zealand showing that on a milk solids basis, supply is up 9.2% for July 2024 compared to July 2023.

It’s a big increase, but July is not a big month for milk, corresponding to January in Ireland. However, good weather in August would suggest NZ milk will be up again.