European dairy markets are in a really strong position as we head into the final weeks of 2019. Prices of almost all dairy commodities rallied higher this week, underpinned by strong export demand. After a number of months of decline, butter prices returned to a positive trajectory this week.

Spot prices for butter reported to the Dutch dairy board are up €40/t this week to just under €3,600/t. At the same time, the rally in skimmed milk powder (SMP) prices is showing no signs of slowing down. This week, SMP prices increased to €2,570/t, which is the highest price level in over five years. The price of whole milk powder (WMP) also moved higher this week to hit €3,100/t.

Cheese markets remain stable but very healthy. Cheddar prices are steady at €3,000/t, while mozzarella continues to trade around €3,150/t.

The current strength of Europe’s dairy market is underpinned by a phenomenal performance in EU dairy exports in 2019.

For the first nine months of 2019, exports of butter from EU countries to global markets are up almost 30% on the previous year to a record 124,000t. The US is the major buyer of EU butter, accounting for 29,000t. Almost all of this (85%) is sourced from Ireland.

EU SMP exports are also up 30% this year to just under 762,500t thanks to soaring demand from China, Indonesia and the Philippines.

Cheese exports are up 4% to 650,000t, while fat-filled milk powder exports are up 14% up to the end of September.