The price movement this week continued upwards, with Dutch spot prices rising to 26.3c/litre on Monday of this week. This time last year, the price was closer to 32c/litre and indeed was closer to 44c/litre for 2013 and 2012. There were little other price announcements this week as the next Global Dairy Trade (GDT) results are not until 6 October.

The results of the monthly EU milk supply survey for January to July show Ireland has the highest percentage increase in milk supplies for the period at just over 8%, with Hungary next-highest at just over 6%. The most significant dairy-producing country in the top 10 was Holland at a 3% increase. Germany posted an increase of under 1%. France and 11 others posted a decline in production of 1%.

Overall, the EU collected 1.1% more milk for the first seven months of the year (January to July inclusive). Only four of these months were quota-free and the increase was in the order of 2.8% for those four months.

New Zealand farmers are predicted to produce less milk this season than last, prompting Fonterra to reduce the amount it puts up for sale on the auction.

In mid-September, Fonterra announced it is cutting back even further the amount of milk it will put up for sale on the GDT over the next 12 months. The dairy giant announced a decrease of another 22,050t, with a 15,200t fall occurring over the next three months and 7,850t of planned volumes being removed later in the year.

Only a month ago, Fonterra said it would cut volumes sold through the global auction by 56,045t, with a 62,930t drop occurring over the next three months.

The co-operative said the September reduction was the result of lower forecast milk supply in New Zealand and a change in product mix away from base milk powders.