European butter prices held firm this week, after a number of weeks of sharp price increases.

Butter is moving at €4,935/t on the European spot market now, a negligible €10/t drop on last week.

Skim milk powder (SMP) saw the biggest price increases this week, up 3% or €75/t to €2,645/t.

Cheddar prices also increased by €75/t and is now trading at €4,100/t.

It’s a sign that the steady improvement in dairy commodity prices is continuing, arresting the decline in prices that have rattled producers over the last five months or so.

Next week’s Global Dairy Trade (GDT) auction will be an interesting barometer of buyer sentiment and China’s interest in the dairy market.

At last week’s Gulfood event in Dubai, Irish dairy processors were represented by Ornua, Bord Bia, Dairygold, Tirlán, Tipperary Co-Op and Lakeland Dairies.

Feedback from exhibitors was positive, with plenty of buyers in attendance.

Making sales is one thing but delivering a high price is another. It will become apparent over the coming months which co-ops are selling well and which have sold badly.

There was little disparity in milk prices over the last 12 months, as demand for dairy soared, but there’ll be a real test of sales strategy over the coming months – co-op board members take note.

Meanwhile in New Zealand, Fonterra has reduced its milk price outlook from the $8.50 to $9.50/kg MS range to $8.20 to $8.80/kg MS range, resulting in a 50c/kg drop in milk price to farmers.