The first six months of 2020 will long be remembered as being one of the most volatile periods for dairy markets in recent memory. The year 2020 started off on a positive footing, with most commentators expecting a good year for dairy prices due to subdued milk supply, strong demand and the full clearance of the European Commission’s intervention stocks of skimmed milk powder (SMP).

In March, the world was turned upside down when the COVID-19 pandemic reached Europe and North America. Suddenly and without warning, the outlook for dairy prices was turned on its head within a matter of days as a massive demand shock hit the dairy sector following the closure of Europe’s food service industry.

Prices crashed and Irish co-ops braced themselves for a difficult year. Thankfully, market sentiment and demand recovered very strongly in late May and June. Market prices for commodities like butter, cheese and milk powder are almost fully recovered to where they were before COVID, although a lot of uncertainty remains, particularly relating to the economic challenges now facing most countries.

This week, European dairy markets are extremely quiet, with very little trade taking place as the holiday season kicks off. Many dairy traders will be looking forward to a break after such a volatile period where market sentiment was changing by the day.

What the second half of the year holds is difficult to say but most dairy traders will be hoping for some stability.