With the stock market in turmoil over tariffs and trade wars, dairy markets didn’t escape the volatility. With heightened fears of a global recession, the general sentiment in dairy markets took a dip.
With the stock market in turmoil over tariffs and trade wars, dairy markets didn’t escape the volatility.
With heightened fears of a global recession, the general sentiment in dairy markets took a dip.
While it hasn’t really materialised into substantially lower prices for key dairy products, it has dampened expectations and the futures markets probably took the biggest hit.
European butter prices dropped by €55/t to €7,305/t and there was further drops for whole milk powder (WMP) and cheddar cheese also. WMP fell by €15/t while cheese prices fell by €65/t.
There was better news for skim milk powder (SMP), which increased by a marginal €10/t. Skim is still back €125/t compared with the start of the year, so skim is a real drag on prices as we head into the Irish peak milk production months.
Interestingly, at the Global Dairy Trade (GDT) pulse auction this week, SMP increased by €46/t and is already trading significantly higher than the spot market price in Europe and has been for some time.
There were gains at the same pulse auction for WMP too, with prices going up by €22/t. However, there is a differential of €670/t between GDT pulse and the European price. Meanwhile, the Ornua purchase price index (PPI) is back for March to 159.6, down from 161.9 in February. When we factor in what they call the Ornua value payment, which is the added value Ornua is getting from the market, the indicative milk price for March actually increases to 47.39c/l excluding VAT. This is lower than actual milk price.
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