There was no major movement in commodity prices in European markets this week, as the very gradual upward momentum continues.
For cheddar, there was no change to the EU price of €3,800/tonne (t). Whole milk powder was also relatively stable, recording a very small drop of €25/t.
Butter’s decline in recent months seems to have finally levelled out. It’s up €50/t this week to around €3,700/t.
Skim milk powder continues to perform well, as demand for the product remains strong. While not quite at record price levels, it is edging closer each week.
European milk supply is starting to tighten as cows drop back in yield. Even countries that are predominantly calving year-round are now noting tightening of supply.
This is being reflected in spot market prices, which are on the rise again. A price of 47c/l on average is being offered for this milk.
The US has recorded a growth in milk supply of approximately 2% for September supplies. This is bad news for Irish dairy markets, but what is worth pointing out is that high calf prices and strong cull cow values are carrying this growth.
Sales of these animals are now accounting for almost one-fifth of total revenue on US farms and responsible for almost all of the profit margin, with milk revenues alone struggling to cover input costs.
Beef prices are at record levels because of the record lows in terms of stock numbers in beef herds. The dairy sector in the US is now supporting and benefiting from a struggling beef industry.
Should anything happen to beef price, milk supply growth would inevitably start to drop.
