Unfortunately for dairy farmers in the northern hemisphere, the spread of the COVID-19 pandemic has coincided with the peak in milk supply. The combined impact of peak milk supply and peak COVID has created a perfect storm and sent global dairy markets crashing in the last week.

In the US, dairy market prices collapsed in a matter of days to their lowest level since the financial crisis of 2009.

Since the last week in March, prices for block cheese traded on the Chicago Mercantile Exchange (CME) have dropped almost 40%, or more than $1,500/t, to below $2,500/t (€2,290/t) – the lowest level for US block cheese prices since 2009.

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Barrel cheese traded on the CME has fared no better, with prices down almost 25% in the last fortnight to $2,400/t (€2,200/t). Meanwhile, butter prices have slumped 30%, or more than $1,000/t, in the last 10 days below $2,800/t (€2,570/t).

Closer to home, Europe’s dairy market has seen similar price collapses. Mozzarella prices have plunged to just €2,400/t as demand collapses 50%. Meanwhile, prices for butter and skimmed milk powder (SMP) are teetering on the edge of intervention levels at €2,500/t and €1,700/t respectively.

The Irish Farmers Journal understands that Irish co-ops are already preparing the specific packaging needed for placing butter and SMP into intervention. The one bright spot in all the chaos is that cheddar prices are holding relatively firm due to strong demand at retail level for longer shelf-life hard cheeses.