The European spot market for dairy jumped up a notch again this week, with spot market prices for butter going up €35/t to €4,765/t and cheddar cheese rising by €30/t to €4,110/t.
There was a bigger gain in the price of powders, with whole milk powder (WMP) going up €80/t to €3,420/t and skim milk powder (SMP) rising by €90/t to €2,485/t.
Prices have been edging upwards for the last four to six weeks and it really does seem apparent that the trough in the dairy markets were met in early to mid-April.
In that time, butter has increased in value by €195/t or an increase of 4%. WMP has increased in value by €170/t or 5% and SMP has increased by €245/t or 11%.
However, the rate of gain in cheese seems to be slower, with the European spot market price increasing by €140/t or 3% on where it was a month ago.
While moving in the right direction, it is still early days, with traders jumpy in the past.
The GDT auction next week will tell a lot more about global demand for dairy.
You get the feeling a positive result at this auction will cement confidence among buyers and sellers that dairy is only going to get more expensive.
With farmgate prices for dairy continuing to come under pressure around the world, the signal to producers is very much to hold back production.
In the UK, the peak supply has ended earlier than in other years, down almost 1% on what AHDB forecast. Meanwhile the USDA is reporting a 6.5% increase in dairy exports in Q1 2023 compared with the same period in 2022.