It was a mixed week on the dairy scene this week. On the one hand, the Global Dairy Trade (GDT) reported a positive result and a lift in the index of 1.2%.
It was a mixed week on the dairy scene this week.
On the one hand, the Global Dairy Trade (GDT) reported a positive result and a lift in the index of 1.2%.
On the other hand, the spot price in Europe continued to decline for all key commodities, with butter continuing to come off the peak, dropping this week by a not-very-pleasant €260/t.
European butter prices are now at €7,730/t, which is still a very high price, but with Christmas orders now filled, the demand has weakened and that is leading to a price drop.
Some of the headline figures from the GDT are also startling.
Butter fell by 5.2% and cheddar cheese fell by 3.2%, while skim milk powder (SMP) fell by 1%.
Despite this, the overall index increased by 1.2%, as prices for whole milk powder (WMP) soared by 4.1% and WMP sales make up over 50% of all the product traded at the auction.
The increased in demand for WMP is good news and welcome.
The GDT price for WMP is now €3,792/t and the last time that it was that high was in July 2022.
The price rise is coming at a good time for New Zealand farmers, as WMP is a key component of the Fonterra product mix.
The difference in price between European WMP at €4,300/t and GDT price at €3,792/t is still substantial, but it is closing, as it was almost €900/t five weeks ago.
Some of the reduction in price in Europe is coming off the back of perceived additional supply, particularly in New Zealand and the United States.
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