Skim milk powder (SMP) is now 24% ahead of the same time last year and hitting for €2,660/t on average in the EU MMO listing.

Butter is at €4,110/t, making the butter and SMP combo the product mix of choice at the moment for highest returns if a processor has that option.

Whole milk powder (WMP) is solid at €3,290/t and cheddar at €3,260, but talk of better prices across the water in the UK emerged in the last week.

Traders there are reporting prices at €4,100 to €4,300 for fresh butter supplies, while the official listings are in between. Frozen supplies are reported to be €100 less.

There are also reports of some Dutch traders starting to buy big on butter. If these reports are true, then the direction of travel for milk prices will be up and up.

US prices have had another decent couple of weeks, with block butter up nearly $70 since the last report to $3,930 [£2,880/€3,350].

Gas and carbon dioxide concerns continue to impact processors. However, the dairy industry is not as badly off on the CO2 issue as other industries, with other options available.

Natural gas prices are rising and many Irish plants are now 100% reliant on natural gas, having switched from heavy fuels.

On the dairy demand side, August saw another very decent level of imports into China, with its main product categories totalling 340,200t, up 74,200t and 28%.

On a cumulative basis so far this year, total imports are now 2.83m tonnes, which is 675,500t and 31% higher than last year.

WMP totals 680,300t, up 43%; SMP totals 311,500t, up 42%; whey imports are 523,600t, up 33%; and butter volumes are 75,400t, up 23%.