The two barometers announced this week that reflect where the market is, apart from weekly commodity prices, were the Ornua purchasing price index (PPI) announced for September and the GDT result on Tuesday (5 October).

The GDT has been rising through September, but the result this week was neutral - it didn’t change from the last auction.

The price of whole milk powder (WMP) traded at the auction dropped 0.4% and the price of skim milk powder (SMP) lifted 0.5%.

It reinforces a steady demand as New Zealand annual milk flow peaks about now.

The Ornua PPI for the month of September is 121.8, up from 118.1 in August.

By our estimates, this result is the highest index reported by Ornua since 2014.

The result equates to an all--in milk price ex-VAT of 37.8c/litre (39.8c/l incl VAT). This can be compared to Irish farmgate prices that are in general 4c/litre behind.

EU dairy commodity prices continued an upward curve this week. SMP was up to €2,690/t, butter to €4,270/t, WMP to €3,330/t and cheddar prices to €3,270/t.

On the supply side, the latest milk supply numbers were just updated by the EU central body and it shows that New Zealand milk production is actually back 2.4% for August (the most recent available supply numbers).

Australia has a much flatter milk supply profile and supply is back there as well. It’s back 3.6%, from 736m litres to 711m litres for the month.

The lift in US milk has slowed also and it’s back to only 1.1% ahead of the year previous.

All year it was running 4%, 3% and 2% ahead. However, now it’s back to 1.1% ahead.