Dairy farmers can thank Donald Trump for the continued positive momentum we’re seeing in European dairy markets. Last week, the US president pulled out of the Iran nuclear deal and imposed fresh sanctions on the Middle Eastern country.

The move has sparked fears in energy markets, as Iran is a major oil exporter. Oil traders pushed the price of Brent crude oil, the global benchmark, close to $80/ba this week – the highest since November 2014.

Rising oil prices have a direct knock-on effect in global dairy markets, with oil-dependent economies accounting for almost one third of global dairy imports. Milk powder prices in particular will benefit from improved affordability in oil-exporting countries.

European spot prices for whole milk powder (WMP) have risen close to €2,800/t this week, according to the Dutch Dairy Board. Irish-made WMP is selling at €2,700/t ex-factory.

Skimmed milk powder (SMP) prices have also risen in the last week and are now approaching €1,500/t – their highest since last October.

On the fats side, butter markets continue to rise due to tight supplies and strong demand.

On European spot markets, butter prices have risen to €5,900/t, while futures markets have July and August delivered butter priced above €6,000/t.

Cheese prices have also risen in the last week. Irish-made cheddar is in a healthy place and is trading at €3,150/t ex-factory. Spot prices for mozzarella and gouda are also in good shape, rising to €3,250/t and €3,000/t respectively in the last week.