European dairy markets took a bit of a rebound this week, bucking the trends of recent weeks. Butter got an uplift of €150/t to go back to €7,120/t, while whole milk powder (WMP) increased by €50/t to €4,255/t. Skim milk powder (SMP) was unchanged from last week, while cheddar prices dropped by €10/t.
European dairy markets took a bit of a rebound this week, bucking the trends of recent weeks.
Butter got an uplift of €150/t to go back to €7,120/t, while whole milk powder (WMP) increased by €50/t to €4,255/t. Skim milk powder (SMP) was unchanged from last week, while cheddar prices dropped by €10/t.
The signals from the Global Dairy Trade (GDT) auction this week were mixed. WMP took a bit of a wallop, dropping by 2.2%, while butter increased by 2.7%.
Powders constitute the majority of the 20,977t of product sold at the auction, so what happens to powder price has a big bearing on the overall change in the index.
While WMP declined, it was a more positive news for SMP, which increased by 0.6% to reach €2,622/t, which is still a nice gap above the European price for skim at €2,445/t.
The biggest increase at the GDT was for lactose, which jumped in price by 14%. It did this two auctions ago also, only to subsequently fall back.
Of note to Irish processors is that cheddar cheese prices increased at the GDT by 1.1% to €4,697/t, which is still trailing the European price, but relative to butter, cheddar cheese prices are struggling. Mozzarella on the other hand increased by 7.9% at the GDT auction.
The drop in price for WMP is not a major surprise given the increase in milk supply from New Zealand this summer, with supplies this season up over 3% compared with last year. Milk price is strong and even though some are affected by drought, most are expected to feed their way through it.
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