Lower prices at last week’s GDT and Dutch Dairy Board (DDB) auctions has filtered through to the milk price indicator (MPI) published by the UFU.
On Friday, the MPI fell by 1.96p/l to 44.4p/l which puts the market indicator at its lowest level since early February 2022.
Dairy markets have been negatively affected by a downturn in demand from China as well as a recovery in milk volumes, with New Zealand, in particular, currently at peak production.
The MPI is a forward pricing indicator, forecasting market returns in eight to 10 weeks. Allowing for a processors margin and transport costs, the latest MPI would point to a base price in the region of 39p/l to 40p/l in early 2023.
At Wednesday’s DDB, butter fell by €250 to €5,900/t which is similar to prices back in February. Skim milk powder fell €150 to €3,000/t with whole milk powder down by a similar amount to €4,300/t.