European dairy markets are on a firm upward curve since the start of the new year thanks to very healthy export demand, coupled with the seasonal low point for EU milk production.
This week saw strong price increases for butter, cheese and milk powder commodities in Europe. Encouragingly for Irish farmers, dairy market watchers believe the recent price rally has not finished yet.
In the last week, European prices for butter increased another €100 to hit €3,450/t, which is really strong. New data from the European Commission underlines the strong export demand for EU dairy, with butter exports for 2020 up 20% on the previous year and will exceed 200,000t in total.
On cheese markets, prices have risen for all the main products. Cheddar prices increased to €3,250/t in the last week, while mozzarella prices have lifted to just over the €2,700/t mark. Again, export demand for EU cheese was strong in 2020, increasing almost 10% year on year to 900,000t.
On the milk powder side, spot prices for both skimmed and whole milk powder (SMP and WMP) increased further this week on the back of strong demand from oil economies. EU prices for SMP increased to €2,400/t this week, while prices for WMP lifted to €2,850/t.
When taken as a whole, EU dairy prices are in a healthy position as we move further into 2021. However, the extent of spring milk volumes across Europe will be key to maintaining the current positive trend for dairy prices in the months ahead.