There was some respite for dairy markets this week as the Global Dairy Trade (GDT) auction returned a positive result, up 3.2% on the last auction, when prices fell by 4.7%.

The biggest gain in the GDT was for skim milk powder (SMP), which increased by 7% and represents about one quarter of all product sold.

Whole milk powder (WMP) was relatively flat, increasing by 1% and representing almost half of all product sold. Butter and cheese increased by 4.9% and 5.7% respectively.

These are important ingredients in the Irish product mix, although as we go into peak milk production, powders will make up a greater proportion of the basket of goods produced per tank of milk.

Closer to home, the European spot market also held its ground somewhat. Butter increased by €20/t, while cheddar increased by €40/t. However, WMP fell by €65/t, while SMP fell by €5/t. Increasing supplies of powders in Europe is likely to dampen prices until demand picks up again.

At Tuesday’s Bord Bia dairy markets seminar, there was some positive news in that North African countries are back buying again - as prices have dropped, dairy is becoming more affordable again. Jasper Endlich from Vespa said he expects European supplies to drop later this year as farmers react to falling prices.

Like most other analysts, he expects China to re-enter the market later this year. Between increased demand from China and falling supplies globally, he expects the dial to shift and prices to turn. However, the lift is unlikely to come in time for the Irish peak.