Dairy Trends: butter increases but cheese falls

The quiet spell in the dairy trade continues as we head into August.

With no Global Dairy Trade (GDT) auction this week or last, the spot markets is our only indicator and these are relatively stable.

It was a better week for butter, with prices going up €70/t to reach €6,735/t and the futures market suggests there is more to be gained in butter over the coming weeks as supplies remain tight.

Cheddar cheese dropped a bit this week, knocking €15/t off the price to reach €4,350/t.

It was steady as it goes for powders, with whole milk powder (WMP) rising by €10/t and skim milk powder (SMP) falling by €10/t. Over at the GDT pulse auction, SMP fell by €14/t while WMP increased by €5/t.

Milk supplies in Britain are back around 0.2% per week for the first three weeks in July 2024 compared with July 2023 according to the AHDB.

Total milk supplies in Britain in April and May are back 1.5% compared with the same period in 2023 and the AHDB says that 440 dairy farmers in Britain have left the sector since April 2023 - a 6% decline.

Yet, overall cow numbers are stable and, as the figures above show, milk production is also relatively stable, so farms are getting bigger.

Looking at European production for the first five months of the year, there is a notable decline in both butter and powder production across Europe.

Butter production is back 2.2% and SMP is back 1.5% compared with 2023. Condensed milk, cream, cheese and fermented milk have all increased in production by 4% to 6%.