The Global Dairy Trade (GDT) auction took a negative turn this week, with key product categories whole milk powder (WMP) falling by 2.8% and skim milk powder (SMP) falling by 5.2% compared with the previous auction.

Together, these products make up over 75% of all the product moved at the auctions, so they have a big bearing on the index, which fell by 2.3% this week. Butter prices dropped by 1% at the auction, while anhydrous milk fat increased by 1.4%.

At the European spot market, there was more mixed news. The good part being that butter prices continue to creep up, albeit at a slower pace than last week.

It increased by €25/t this week to €5,960/t which is an identical price to that achieved at the GDT auction.

WMP increased by €15/t to hit €3,620/t, while SMP fell sharply by €75/t to hit €2,410/t, which is again a similar price to the GDT.

So we are seeing that European and GDT prices have converged, despite notable differences at the start of the year.

Despite the drop in the GDT this week, the outlook for milk prices is still reasonably good and Rabobank is predicting gains in European milk prices over the summer months, which is obviously important from an Irish peak perspective.

It is predicting an average milk price of €47.5/100kg (46.1c/l) at 4.2% fat and 3.4% protein excluding VAT. The current price in Europe is €46.6/100kg (45.24c/l), so not a massive gain over the course of the year. Of course, Irish prices are lagging the European price significantly at present.