So far, January has been a pretty good month for dairy markets and even though the first Global Dairy Trade (GDT) auction brought a negative result, this week’s auction corrected that, increasing by 1.4%.

The main mover was whole milk powder (WMP), which increased in price by 5%, buoyed no doubt by increased buying from China where domestic milk production has reduced considerably on the back of low milk prices.

Imported milk is cheaper than domestic milk in China.

It was a good result for skim milk powder (SMP) also, which increased by 2%, while butter increased by 2.2%.

In Europe, prices held steady for the key dairy commodities, with WMP increasing by €50/t and SMP increasing by €10/t.

There was a €5/t increase for both cheddar cheese and butter. Butter price, at €7,290/t, is exceptional and the fact that the market seems content to pay it is more remarkable and a good signal for Irish milk prices as the season begins to kick off again.

There are of course risks to milk price, with foot-and-mouth disease in Germany and Donald Trump back in the White House.

Some German dairy farmers were in turmoil last week, as fresh milk wasn’t being processed outside of Germany, so farmers who were moving milk across borders to processors in neighbouring countries had to find other homes for that milk.

As for Trump, if tariffs are applied to produce from Canada and Mexico, it will be disruptive to dairy markets within those countries, but if it extends beyond that to Europe, it’ll be a bigger problem.