European dairy commodity prices are relatively steady and it’s fair to say the cheese market is actually looking that bit brighter this week.

There seems to be a general trend of tightness around milk supply and, at this time of the year, milk supply is tapering off and will taper further into November and December.

We see ongoing issues around drought and feed for dairy farmers in Ireland and further afield, which is probably not doing anything for milk supply concerns.

Good demand

My sources say European winter feed stocks on dairy farms are good, but I know many Irish farmers whose cows are eating away nicely through winter feed at the moment. The longer the rain holds off, the harder it is to get an autumn bounce in grass growth rates.

The demand for cheese is good, partly because school is back and the holidays are over. It looks like prices are heading for €5,400/t and above, with cheddar and mozzarella carrying the heavy load on the price rise.

All the talk earlier in the summer was that maybe price inflation will cool dairy demand, but hard to get concrete examples of this, yet anyway. In many European countries, food inflation has been published as 10%-plus. However, the other protein options have also increased in price, so options of cheaper alternatives are less and less.

July Irish farmgate milk prices are published on page 28. The Ornua PPI shows August at 59.2c/litre ex-VAT versus league prices at 54c/l for July. The farmgate price increases since March have been very, very significant.