Dairy markets continue to paint a downbeat picture this week, as milk supply rebounds across Europe.

Spot prices from the Dutch Dairy Board this week show that butter markets are tumbling rapidly, with prices falling to €5,150/t.

While this is still an extremely strong price for butter by any historical measure, its concerning to see spot market prices falling almost €1,850/t in a matter of weeks.

The negative sentiment is also hitting powder markets.

Skimmed milk powder (SMP) prices continue to set new floors on a weekly basis, with spot prices this week falling further to lows of €1,400/t.

Whole milk powder (WMP) prices have also weakened by €500/t in the last month to hit €2,650/t this week.

Markets have reacted negatively to recovering milk production in the big producing regions of Europe. Germany, France and the UK have all posted increases in domestic milk production for August as farmers react to high milk prices.

However, the big negative for many in dairy markets was the increase in Dutch milk production for September, which stood at 1.1bn litres – 0.5% higher than the same month last year.

The phosphate dilemma in the Netherlands is not having the impact on milk supply that many had hoped for.

While some quarters had predicted a 10% decline in Dutch output, its likely milk supplies for the full year 2017 will be back less than 1%.

Meanwhile, in the US, September milk supply was up 1% to 7.5bn litres.

Read more

Dairy markets: renewed milk output dampens sentiment

Who is the new CEO at Carbery Group?

Small volume of SMP sold

Major milk producers upping supply again