Sentiment in dairy markets is very definitely beginning to swing upwards, albeit from a low base, after a positive week for dairy commodity prices, particularly butter and cheese.

Quotes from the Dutch dairy board this week show price improvements across the board for butter, whole and skimmed milk powder. Indeed, since the beginning of May, Dutch butter quotes have lifted more than €500/t to just below €3,000/t. WMP and SMP prices have risen €250/t and €120/t respectively since the start of May, although milk powder prices remain weak.

The lift in prices has led Dutch processor Friesland Campina to announce it will increase its sales price for cheese due to improved balance in supply and demand. The group also said it was seeing the first signs of change on the world market, allowing it to begin increasing prices of basic dairy products.

In the US, butter prices continue to strengthen, with quotes lifting a further $63/t to sit at nearly $4,600/t. Skimmed milk powder prices have also strengthened on the back of higher prices in the EU.

Despite the positive turn in market sentiment, the latest GDT auction from New Zealand returned a flat performance, with the average product selling price maintained at just over $2,300/t.

While there was increases in the average price of cheddar (+7%), butter (+5%) and SMP (+1.5%), a 4.5% drop in the average price of WMP kept the index flat this week.