The outlook for milk prices heading into 2019 received a major boost last week after 60,500t of skimmed milk powder (SMP) were sold out of EU intervention.

This latest sale means the European Commission has now sold 277,000t of its intervention stocks of SMP in 2018, which leaves a little over 100,000t of SMP remaining in intervention.

This latest reduction in SMP stocks has injected fresh impetus into Europe’s milk powder markets, with spot prices for fresh SMP rising to €1,750/t this week – the highest price level in over two years.

Expectations are now growing that the remaining stocks of SMP will be cleared by the end of February 2019, as buyers seek to lay their hands on the last of the ‘cheap’ SMP in comparison to fresh product.

Meanwhile, in New Zealand, the GDT ended 2018 on a positive note, with average dairy prices rising 1.7% at this week’s auction in New Zealand.

With just over 36,000t of product sold this week, dairy commodity prices from the benchmark dairy index were led higher by rising prices for butter (+5% to €3,455/t) and anhydrous milk fat (+4% to €4,345/t).

On the powder side, the price of whole milk powder (WMP) was flat at €2,350/t, while SMP prices jumped more than 3% at this week’s GDT to €1,795/t.

While the GDT finishes 2018 on a positive note, the last six months have been disastrous for the auction platform, as dairy prices recorded seven months of consecutive price declines from May to November.