Dairy markets continue to weaken this week, with declines at the Global Dairy Trade (GDT) auction of 2.7%, following on from the previous decline at the last auction of 3.4%.
The big reduction this time around was once again for butter and anhydrous milk fat (AMF).
Butter fell by a substantial 7.9% and has fallen by a total of 19% over the last two auctions.
AMF fell by more this week, declining by 9.6% and that too has declined by 18% over the last two auctions.
In contrast, the price of GDT staples such as whole milk powder (WMP) and skim milk powder (SMP) held up at this week’s auction, with WMP down 0.6% and SMP actually up 3.2%.
This proves the continuing good showing for SMP, which has had a good start to the year. However, the decline in butter will be a worry to all producers.
Meanwhile, at the European spot market, the situation was no bleaker than it has been for the last six months, but certainly no better either.
Butter took the biggest hit, declining in price by €100/t to reach €3,875/t. It’s almost as low now as it was in the early days of January.
The only positive is that other commodity prices are holding up a bit better, with relative stability for cheese prices.
Ultimately, demand for dairy is very weak globally, with the shocks of the war in the Middle East really having an impact.
This column suspected nearly two months ago that it could lead to a lift in demand, but that hasn’t proven to be correct.
The huge uncertainty in energy prices and wider geopolitical concerns has dented demand, the only exception being for SMP.
Dairy markets continue to weaken this week, with declines at the Global Dairy Trade (GDT) auction of 2.7%, following on from the previous decline at the last auction of 3.4%.
The big reduction this time around was once again for butter and anhydrous milk fat (AMF).
Butter fell by a substantial 7.9% and has fallen by a total of 19% over the last two auctions.
AMF fell by more this week, declining by 9.6% and that too has declined by 18% over the last two auctions.
In contrast, the price of GDT staples such as whole milk powder (WMP) and skim milk powder (SMP) held up at this week’s auction, with WMP down 0.6% and SMP actually up 3.2%.
This proves the continuing good showing for SMP, which has had a good start to the year. However, the decline in butter will be a worry to all producers.
Meanwhile, at the European spot market, the situation was no bleaker than it has been for the last six months, but certainly no better either.
Butter took the biggest hit, declining in price by €100/t to reach €3,875/t. It’s almost as low now as it was in the early days of January.
The only positive is that other commodity prices are holding up a bit better, with relative stability for cheese prices.
Ultimately, demand for dairy is very weak globally, with the shocks of the war in the Middle East really having an impact.
This column suspected nearly two months ago that it could lead to a lift in demand, but that hasn’t proven to be correct.
The huge uncertainty in energy prices and wider geopolitical concerns has dented demand, the only exception being for SMP.
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