European spot prices remain more or less unchanged this week, as the spring flush of milk on to the market hasn’t done anything to improve the supply and demand dynamics of the dairy trade.
Butter and whole milk powder (WMP) dropped by a marginal €5/t, while cheddar dropped by €20/t and skim milk powder (SMP) took a bigger wobble, falling by €75/t. The spot price for butter is now €4,750/t, while WMP is €3,435/t.
It’s hard to see the situation changing to any great degree over the coming weeks, as China continues to sit the market out.
It was always predicted that China would re-enter the market in the second quarter, so all eyes will be on what the Asian powerhouse does next.
According to ANZ Bank in New Zealand, China has imported 68% less dairy products in the first two months of 2023 compared to the same period last year, on top of the 16% reduction in imports for the whole of 2022.
That bank is predicting New Zealand milk prices to fall further before the season wraps up in the next few months.
Another 6c/l was wiped off Irish milk prices last week as the drop in dairy commodity prices hits home. Milk supply in Europe is higher now than it was this time last year.
German milk production is up 3.6%, Netherlands is up 4.7% and Poland is up 1.6% for January. Milk production in the US is also up, with January 2023 supplies 1.3% higher than January 2022. There really needs to be a corresponding increase in demand for that extra product to be utilised without further decreasing the market.