The current state of the global dairy market is hard to figure out and even harder to predict.
There are mixed messages across the board, ranging from the high Global Dairy Trade (GDT) auction result last week – which saw prices rise by 6.7% – to a continuation of milk price cuts in the US.
A rally in some of the key dairy markets has taken place over the last week or two in Europe, which has seen butter prices rise by almost €250/t, while skim milk powder (SMP) has increased by €230/t.
This week, we are seeing butter trading at €4,085/t in northwest Europe, while SMP is trading at €2,375/t.
These prices aren’t high, at least not in recent times – nor do they represent a shift in market towards higher prices and ultimately higher milk prices. What they do signal is a correction on where the floor is, which is good news for Ireland’s farmers.
Now, it will be argued by the co-ops that actual milk prices never went as low as the market did and that co-ops are still supporting prices.
It’s interesting to note that the main rally has been for protein and butter, but that cheese prices remain static at best, with cheddar cheese only increasing by €20/t this week in Europe. Even whole milk powder (WMP) is flat, only increasing by €10/t this week.
There are thoughts that the infant milk formula recall saga has led to an increase in demand for SMP. It can also be argued that the low prices drove up extra demand and this has lead to a short-term price squeeze. Whatever the real reasons, the dairy market is hard to figure out right now.
The current state of the global dairy market is hard to figure out and even harder to predict.
There are mixed messages across the board, ranging from the high Global Dairy Trade (GDT) auction result last week – which saw prices rise by 6.7% – to a continuation of milk price cuts in the US.
A rally in some of the key dairy markets has taken place over the last week or two in Europe, which has seen butter prices rise by almost €250/t, while skim milk powder (SMP) has increased by €230/t.
This week, we are seeing butter trading at €4,085/t in northwest Europe, while SMP is trading at €2,375/t.
These prices aren’t high, at least not in recent times – nor do they represent a shift in market towards higher prices and ultimately higher milk prices. What they do signal is a correction on where the floor is, which is good news for Ireland’s farmers.
Now, it will be argued by the co-ops that actual milk prices never went as low as the market did and that co-ops are still supporting prices.
It’s interesting to note that the main rally has been for protein and butter, but that cheese prices remain static at best, with cheddar cheese only increasing by €20/t this week in Europe. Even whole milk powder (WMP) is flat, only increasing by €10/t this week.
There are thoughts that the infant milk formula recall saga has led to an increase in demand for SMP. It can also be argued that the low prices drove up extra demand and this has lead to a short-term price squeeze. Whatever the real reasons, the dairy market is hard to figure out right now.
SHARING OPTIONS