The big news this week is the big drop in the price of butter on the European spot market, with prices falling by €475/t compared with last week.

Over the previous six weeks or so, butter was on a rally and increased in price by about €900/t, but we have seen half of those gains wiped out in a week.

In contrast, skim milk powder (SMP) is in much higher demand, increasing in price by €100/t.

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Speaking on the Inside Dairy podcast last week, Ciaran Aylward from Ornua said that in times of strife, such as the current war in the Middle East, buyers turn to SMP as a safe bet because it stores well and is versatile.

The increase in price of skim is not just war-related. Attendees at the Bord Bia markets seminar on Tuesday heard that the increased demand for protein, particularly in the US, is driving the increase in price for SMP.

If only the price of butter would keep rising, Irish co-ops would be in a better place, as they’re big players in both butter and skim.

Stable

Meanwhile, cheese and whole milk powder (WMP) prices remain stable.

The next Global Dairy Trade auction is not until 7 April, but at the pulse auction this week, WMP prices fell by €120/t, while SMP prices increased by €30/t. Last week’s auction was flat, but WMP prices fell by 4%.

Global milk supplies continue to increase, with the US milk output up again for February albeit at a slower rate of gain compared with January.

It’s a similar story in the Netherlands where milk volumes for February are up 5.4%, just behind the supplies in February 2024.