The dynamics of dairy markets remain conflicting. Dairy fat commodities continue to command healthy returns, while proteins remain challenged.

European prices for whole milk powder (WMP) weakened below €2,600/t this week, following last week’s GDT auction where WMP prices fell 1% to $3,232/t (€2,615/t). Skimmed milk powder (SMP) prices continue to find new floors as the EU’s intervention stockpile overhangs markets.

Spot prices for SMP have traded as low as €1,180/t in the last week, while prices reported to the Dutch Dairy Board this week fell to €1,290/t.

Butter

On the butter side, prices remain firm across Europe this week, with spot butter prices ranging from €4,500/t to €4,750/t. Butter prices reported to the Dutch Dairy Board this week are steady at €4,800/t, while, on futures markets, June 2018-priced butter has ranged from €4,800/t to highs of €4,900/t. It’s important to note that Irish butter typically trades about €500/t below the EU average price.

The driving force in butter markets remains strong demand coupled with tight supplies. However, last year’s spike in butter prices is still fresh in the memory for many buyers and sellers who got caught out. This is playing its part in keeping prices firm and adding to volatility in futures markets.

On the cheese side, cheddar prices are pushing close to €3,300/t, while mozzarella and gouda are both fetching between €2,800/t and €2,900/t this week.

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