The farmgate price trend continues upwards for the European co-ops as they set prices for March. Irish processors start to meet next week to set February prices.

Dutch dairy companies Royal A-ware, Friesland Campina and DOC Kaas all increased prices.

Arla also increased.

Turmoil in Ukraine saw Danone, Nestlé and Lactalis completely or partially stop production there, which could further heat up markets.

Some French product that was getting into Russia might also have to find a home in the US I’m told.

Last week, we saw Fonterra revise its milk price forecast upward for the third time in six weeks. On 3 December, Fonterra announced a revision to sit at NZ$8.70/kg of milk solids (MS) (36c/l). Then it revised this on 24 January for the midpoint to lift 50c and hit $9.20/kg MS (38c/litre).

On Thursday last week, it lifted its farmgate predicted price again to hit $9.60/kg MS (39.6c/litre). So, in the space of six weeks, the forecasted milk price for NZ dairy farmers has lifted almost 4c/litre to hit just shy of 40c/litre excluding share earnings.

The Ornua index lifted again this month, reflecting what they can get from the market. The base price for the February PPI is up to 152.3 from 147.2 or 43.4c/litre ex-VAT, the same as it was in January now that the processing cost is increased (see news). A combination of GDT increases, strong markets, lower supply than anticipated in exporting or dairy trading countries will see markets continue the upward movement.