In a week that saw savage cuts to milk prices imposed by some Irish processors, farmers will take cold comfort, but comfort nonetheless, from the bounce in dairy commodity prices on the European market this week.

For the first time in a long time, we have more green arrows than red arrows under the key dairy product categories.

Butter prices increased by 9% this week, rising by €385/t. Remember, at last week’s GDT auction, butter prices increased by 6.6%, so the uplift in European prices is following the New Zealand trend.

Butter prices are still a long way off their late summer peak when they were hitting over €7,000/t, as they are currently at €4,670/t.

Whole milk powder and skim powder also increased in price by €100/t and €205/t respectively, setting in the seeds of hope that the bottom of the market has been met.

The rise in prices is a further indication of increased buying activity.

With no indication of an uplift in supply across Europe or New Zealand, the outlook for a continued rise in dairy commodity prices looks positive.

Milk prices have already fallen on the continent and costs are high, so farmers have no incentive to produce more.

More severe weather in New Zealand’s North Island is going to seriously disrupt milk supply in the affected regions.

If these trends continue, the pressure will be on the co-ops’ sales teams to get the best value for Irish milk.

For the last few months it was very much a buyer’s market - let’s hope that the co-ops didn’t forward sell too much milk at these low prices.