The majority of processors have cut milk prices for April supplies, despite clear signs that Europe’s dairy markets are recovering.

Dairygold reduced its base price for April milk supplies by 1c/l, with suppliers receiving 27.22c/l excluding VAT, inclusive of bonuses.

Kerry Group will pay its suppliers a base milk price of 27.98c/l excluding VAT for April supplies, a decrease of 1c/l on its March price.

Carbery has cut its base milk price by 0.5c/l and also reduced funding supporting milk price from its stability fund by 0.5 c/l, in effect cutting its April price by 1c/l to 29.7c/l, excluding VAT.

Aurivo has held its base price for April milk at 28.46c/l excluding VAT.

Dairy market recovery

There are now clear signs that Europe’s dairy market is in recovery mode, following the sharp fall in prices witnessed in April after the shutdown of Europe’s €600bn food service market.

Since early May, spot prices for butter, cheese and even milk powders have been rising week-on-week, albeit from a low base.

This week, butter prices moved above €3,000/t for the first time since March, while cheddar prices lifted again this week to €2,900/t.

Milk powder prices have also improved. At this week’s GDT auction in New Zealand, prices for skimmed milk powder (SMP) shot up 7% to hit $2,550/t (€2,330/t), which is almost €350/t ahead of European SMP prices.

The slow reopening of European economies in the last 10 days is definitely helping demand recover.

On top of this, the €30m support package announced by the European Commission to open private storage aid for butter, cheese and SMP certainly helped to rebuild confidence in dairy markets.