The New Zealand milk supply numbers for September are just out this week and they show another decline year on year compared to last season.

We have to go back four years before we see supply figures as low for September.

This puts more perspective on why market sentiment is so positive. Remember New Zealand is predicting record milk prices and yet milk supply is back at a four-year low for September.

US

The US milk supply numbers are also just available this week and again they show a decline compared to where they were earlier in the year.

In the earlier part of 2021, milk supply results were running 3% and 4% ahead of where they were the year previously but now September milk supply numbers are back on par with where volumes supplied were this time last year.

The US of course has a relatively flat milk supply profile and they are not as big on export markets as New Zealand but nevertheless they are significant players.

In the EU, Germany, The Netherlands and France are all still back between 1.5% and 2% compared to the same period last year.

All these supply updates reinforce the positivity and bullish market that dairy commodities are in at the moment. Butter and powders continue to drive the market so processors that can deliver on this mix can deliver better prices.

Those dependent on cheese market are not as positive but UK cheddar prices have moved up significantly over the last couple of weeks.