Last Tuesday’s GDT event saw another overall decline for milk product prices. This was primarily driven by another poor showing for powders. The price of whole milk powder (WMP) declined almost 12.4%, to $2,782/t.
Skimmed milk powder (SMP) – the second largest commodity traded – also took a large tumble as prices fell by 15.5%, to $2,118/t.
This second consecutive slip in prices is largely down to market instability, where an increase in EU volumes and a decrease in New Zealand volumes has affected trading.
On a positive note for Irish farmers, butter and butter milk powder were the only two commodities to show a price rise, showing increases of 1.2% and 8.4% respectively.
The Irish dairy industry has recently seen the resurgence of butter as a bright spot for farmers amid poor dairy prices.
In the futures markets, April, May and June contract prices for whole milk powder (WMP) have declined 8% over the last week. As can be seen from the red line in the graph below, the futures market price for WMP hit its lowest point for over five months last Thursday.
However, despite the overall decline last week, futures prices over the weekend increased by 2% from Friday to Monday, marking the first rise in futures prices for three weeks.
The next GDT auction will take place on 21 March and next week’s futures prices will give a strong indication as to the direction of prices at the trade.