European dairy markets had another torrid week, with butter losing more ground in the battle to stay up.
The price of butter on the European spot market fell by €310/t this week, with butter prices now less than €4,500/t.
At €4,475/t, the price of butter is now at its lowest since early 2023 and is very close to the bottom at that time.
Nobody knows whether or not butter will go lower in the coming months than it was in 2023, but the positive is that the futures price is not suggesting further drops.
It wasn’t a good week for powder prices either, with whole milk powder (WMP) falling by €75/t, while skim milk powder (SMP) fell by €30/t.
Powders have been a bit more resilient in price over the last few weeks. However, WMP is still back about 25% compared with where it was during most of the summer.
Speaking at the Teagasc dairy conference this week, UK market analyst Chris Walkland wasn’t very confident of a quick turnaround.
He said that at low milk prices, dairy farmers in the UK will be cutting back on feed in order to reduce costs, which he said will have an impact on supply. However, he said that this wasn’t true everywhere and cheap feed prices in the US are likely to keep farmers there producing more milk in order to make up for the lower milk price.
Interestingly, at Dairy Day, New Zealand farmer Simon Lynskey said that a small downward shift in Fonterra’s milk price would have negative consequences for profit among Kiwi farmers.
European dairy markets had another torrid week, with butter losing more ground in the battle to stay up.
The price of butter on the European spot market fell by €310/t this week, with butter prices now less than €4,500/t.
At €4,475/t, the price of butter is now at its lowest since early 2023 and is very close to the bottom at that time.
Nobody knows whether or not butter will go lower in the coming months than it was in 2023, but the positive is that the futures price is not suggesting further drops.
It wasn’t a good week for powder prices either, with whole milk powder (WMP) falling by €75/t, while skim milk powder (SMP) fell by €30/t.
Powders have been a bit more resilient in price over the last few weeks. However, WMP is still back about 25% compared with where it was during most of the summer.
Speaking at the Teagasc dairy conference this week, UK market analyst Chris Walkland wasn’t very confident of a quick turnaround.
He said that at low milk prices, dairy farmers in the UK will be cutting back on feed in order to reduce costs, which he said will have an impact on supply. However, he said that this wasn’t true everywhere and cheap feed prices in the US are likely to keep farmers there producing more milk in order to make up for the lower milk price.
Interestingly, at Dairy Day, New Zealand farmer Simon Lynskey said that a small downward shift in Fonterra’s milk price would have negative consequences for profit among Kiwi farmers.
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