The most recent Global Dairy Trade (GDT) auction was down again during the week. The average result was down 2.9%.
The fall wasn’t quite as dramatic as the previous fall of 8.5% two weeks prior to that.
It means that the last three auction results were down 3.6%, 8.5% and now 2.9%.
However, all dairy analysts are still confident that we are not looking at a crashing down on milk prices, as supplies are tight.
Futures prices for butter and skimmed milk powder have started to rise again this week, signalling that a return to more positive prices might be around the corner once again.
Nobody is suggesting that Irish farmgate milk prices will come down anytime soon, as, in general, they are still only catching up with commodity markets and will catch up further when May and June prices are set.
Internationally, the butter and skim product mix is delivering about 70c/litre currently and most processors are heading or exceeding 70c/litre for that mix.
Of course, not all is sold at that price, as processors have contracts in place that will have product sold at lower prices.
Of late, butter and powder prices have been under pressure, with cheese less volatile.
Analysts suggest the reason is that demand in African countries is down, as prices are out of reach to some extent.
In addition, there is some uncertainty about Chinese demand, as Chinese supply is increasing, but also the impact that new outbreaks of COVID-19 is having on some Chinese cities at the moment.