It’s always a good sign when there are more good weeks than bad weeks on the dairy markets and this week was another good week.

The price of butter has broken the record it set just two months ago and now stands at €8,165/t in Europe.

It’s a huge price for butter, up €280/t on last week’s price.

This week’s Global Dairy Trade (GDT) auction was also very positive, with the index increasing by 1.9%, on top of the 4.8% increase at the previous auction.

The main mover at the GDT was whole milk powder (WMP), which went up by 3.2%.

Skim milk powder (SMP) went up by 0.9% and butter went up by 0.5%.

The differential in butter prices between the GDT price and the prices quoted in Europe is substantial, with butter at the GDT making €6,641/t, which is over €1,500/t lower than the European price.

Irish co-ops should be benefiting from that and it’s good to see that most of them have lifted prices again for October milk.

Interestingly, cheddar prices fell at the GDT by 3.1% and they have been flat in Europe at €5,000/t for the last three weeks.

All of this indicates that cheese is plentiful and butter is scarce, hence the price of butter is soaring. The quantity sold at the auction was just over 36,000t, which is back a bit on the last auction but still a high amount of product traded.

Milk supply in New Zealand has been very strong since the new season started, but very wet weather in the lower part of the South Island could reduce supply.