Dairy markets look relatively stable this week with very little change in commodity prices.

Skim milk powder was the only one of the four commodities to see a price increase. The increase was also small at €25/tonne.

Part of the reason commodity prices had increased in the past two months was due to an increase in global demand as China filled up its stock reserves. This was driving SMP and whole milk powder (WMP) demand, in particular.

ADVERTISEMENT

That demand has now slowed as China begins pulling back on the amount of product imported.

WPC-80 and WPI-90, which are the premium whey protein products, had been the big success story earlier on this year. Prices became so high that demand couldn’t keep up and as a result, prices had been falling rapidly over the last month.

This week, prices have steadied with WPC increasing €750/tonne to around €24,000/tonne, and WPI increasing €330/tonne to €29,000/tonne.

Futures

The future markets for commodities have been mixed in recent weeks, but in general this week the trend looks positive.

Milk production in Europe is still high but the expectation that supply should reduce slightly later in the year remains.

Friesland-Campina, a major European co-op based in the Netherlands but spanning countries like Germany and Belgium has moved to increase its milk price by almost 1.35c/l this week. The co-op forward pays so the quoted price is for October supplies. Based on the constituent’s Irish milk is paid at the milk price would equate to just under 40.5c/l.