Dairy markets were finely balanced this week, with the New Zealand-based Global Dairy Trade (GDT) auction reporting no change in the index, while European spot market prices for dairy commodities showed some signs of weakening.

There was no change in the price of whole milk powder (WMP) at the GDT, which largely explains why the index didn’t change, as WMP is such a big part of the auction, making up over half of all product sold.

While the price of WMP didn’t move in the GDT, it did go up €35/t on the European spot market, which is an outlier in terms of price rises this week across the basket of key commodity items we look at.

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Butter fell in Europe by €70/t and is now trading at €4,645/t – the same as it was in mid-February. However, demand for butter was strong at the GDT, with prices there rising by 5.5% and a tonne of butter there trading at €4,929/t when we convert it back to Euro.

SMP value halved

Meanwhile, skim milk powder (SMP) was back 2.3% in the GDT and back €35/t on the European spot market to €2,440/t.

Exactly 12 months ago is when the dairy markets peaked and at that stage, a tonne of SMP was making €4,165/t, so it has almost halved in value during that time. While it was a short-lived peak it highlights the huge change in market sentiment since then.

Cheddar cheese prices were back 3.3% at the GDT and back €20/t on the European spot prices. Meanwhile, in the US there are reports of the government buying up to 21,000t of cheese to shore up prices.