Although milk production continues to be strong across Europe, dairy market prices are holding up well. Butter prices, in particular, have found further price rises over recent weeks, despite the increased volume of milk coming out of the EU’s big three milk producers - Germany, France and the UK.

Since the start of February, spot prices for European butter have increased by almost €500/t to sit just below €4,500/t in the last week. The price outlook for butter remains firm, with futures prices for butter for the second quarter (April to June) of 2018 rising above €5,000/t in the last week.

On the cheese side, European spot prices for cheddar remain steady above €3,000/t. Skimmed milk powder (SMP) prices remain very weak in historical terms at less than €1,400/t. However, prices have risen slightly in the last week.

This week’s GDT event should shed further light on buyer sentiment in dairy markets. The effects of the recent drought in New Zealand continue to be felt and milk supply is likely to be down for January.

Dairygold sets January milk price

Solid butter and cheddar demand

Monday dairy markets: butter prices continue to firm

Despite strong milk production in some major producing countries, dairy commodity prices remain firm across Europe.