The dairy market took another bit of a wobble this week with the news that the Global Dairy Trade (GDT) auction declined by 3.4%.
While not the biggest decline, it was interesting to note that the main drop was for butter and anhydrous milk fat, which fell by 8.1% and 7.1% respectively.
Meanwhile, powders were more stable, although they still fell, declining in price by 1.6% for skim milk powder (SMP) and 0.7% for whole milk powder (WMP).
The declines on the GDT mirrored those in Europe, although the spot market prices have seemed to stabilised.
Butter took the biggest fall this week, dropping in price by €100/t to sit below €4,000/t.
WMP and SMP also declined but by €25/t and €75/t respectively.
It’s interesting to note that while the GDT butter price has fallen, the price is still significantly higher than the European price, with a tonne of butter in the GDT selling for €5,363/t while European butter is going for €3,900/t and we can decipher that Irish butter could be even lower than this, depending on how old the stock is.
Talk on the market is that there is plenty of butter in stock in Europe, hence the price differential. It’s a similar story when it comes to powders, with European skim at a discount to GDT skim. While these are issues for European producers, it does mean that they will be more competitive on the world market.
The key thing is to see what happens now that a ceasefire has been announced in the Middle East. If the ceasefire is sustained, will the global market bounce back and, if so, what impact will it have on demand?
The dairy market took another bit of a wobble this week with the news that the Global Dairy Trade (GDT) auction declined by 3.4%.
While not the biggest decline, it was interesting to note that the main drop was for butter and anhydrous milk fat, which fell by 8.1% and 7.1% respectively.
Meanwhile, powders were more stable, although they still fell, declining in price by 1.6% for skim milk powder (SMP) and 0.7% for whole milk powder (WMP).
The declines on the GDT mirrored those in Europe, although the spot market prices have seemed to stabilised.
Butter took the biggest fall this week, dropping in price by €100/t to sit below €4,000/t.
WMP and SMP also declined but by €25/t and €75/t respectively.
It’s interesting to note that while the GDT butter price has fallen, the price is still significantly higher than the European price, with a tonne of butter in the GDT selling for €5,363/t while European butter is going for €3,900/t and we can decipher that Irish butter could be even lower than this, depending on how old the stock is.
Talk on the market is that there is plenty of butter in stock in Europe, hence the price differential. It’s a similar story when it comes to powders, with European skim at a discount to GDT skim. While these are issues for European producers, it does mean that they will be more competitive on the world market.
The key thing is to see what happens now that a ceasefire has been announced in the Middle East. If the ceasefire is sustained, will the global market bounce back and, if so, what impact will it have on demand?
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