The arrows continue to point upwards on prices for dairy commodities, especially butter. This is good news for those processors that have the butter and skim milk powder (SMP) combination. If the processor gets more, the farmers should get more.
It’s probably not as good news for those that have a basket with cheese only, as cheddar prices are stable and, overall, the cheddar basket is not returning as good as those that have butter, cheddar and powder in the mix.
Average butter prices are up to €4,120/t from €4,040 last week. SMP is up by €10/t on last week to €2,630/t. Whole milk powder (WMP) is up €30/t to €3,210/t.
What’s underpinning the market is the fact that supply from some of the big European countries is well back for the first three months of the year. Germany, France, the Netherlands and Denmark are big players in the milk market and they were all back on milk supply for January to March.
Germany was back 2.5% compared with 2020, France was back 3.5% compared with the first three months of 2020, the Netherlands was back 2.4% and Denmark was back 1.7%.
Volumes in these countries for these first three months are high, not like Ireland. However, to balance these shortfalls relative to last year, the US milk supply is up 1% for the first three months of 2021.
On page 29 we carry the milk prices paid out for April and our comparison with what Ornua says it can get from the market. Fonterra is also forecasting a very positive milk price for its milk year that starts in July.