European spot market prices for butter, skimmed milk powder (SMP) and cheddar cheese increased again this week, with butter increasing by €45/t, SMP by €15/t and cheddar going up by €35/t.
The only blip was for whole milk powder (WMP), which decreased in value by €30/t.
As an overview of trade, it’s relatively positive, as it doesn’t seem that the lower than expected Global Dairy Trade (GDT) auction result from last week affected trader sentiment too much.
The next GDT auction in early June will tell a lot about trader sentiment towards dairy.
As we head towards the mid-point of the year, most analysts would have expected the market to be further on than it is.
While the last few weeks have been positive in terms of steady price gains for most categories, we are still a good bit off these commodity price rises having a tangible impact on farm gate milk prices in Ireland or elsewhere.
While milk supply in Europe is decreasing, albeit slower than many expected with northern Europe showing strong supply earlier this year, production continues to grow in other parts, with New Zealand and US milk supply up for the last three months.
Speaking at an MTU-organised seminar in Cork this week, Andrew Novakovic from Cornell University was bullish on the prospects for dairy in the US, saying that the federal government will continue to support small- and medium-sized farms to stay in business and producing milk.
Milk supply in the US is up 1% on an annual basis, although the pace of growth has slowed.