Dairy Trends: early green shoots of milk price recovery?

A small bit of a change of tone is beginning to take hold in the dairy markets.

The recent heatwaves in the UK, France and Germany are having a fairly significant impact on milk volumes there.

The data from France is the most severe, with milk volumes down 7% in the week of the recent heatwave compared with the previous week.

In Germany, supplies fell by almost 4%, while milk collections in Britain were also back significantly during the heatwave.

The reduction in supply tends to have an impact on the spot milk market and short-shelf-life products such as cream, all of which have seen an increase in price across the continent.

The spot milk price in the Netherlands jumped nearly 20c/l in the space of the last two weeks, which is massive.

Cream has also increased in price, particularly in the UK where cream prices are rising higher than on the continent.

One supposes all the strawberries and cream consumed at Wimbledon last week must have also had an impact on demand.

While cream is not a big deal for Irish producers, seeing cream prices rise in the UK and the continent is good news all the same, because it means that less butter will be made and less butter around is definitely good news for Irish butter churns.

Butter and cheese price are beginning to rise all the same, with butter on the European spot market up up €190/t to €3,890/t. Cheese is also up this week by €100/t to €3,325/t. Powders have also rebounded with skim up €210/t to €2,885/t.

It might be too early to tell, but perhaps we are seeing the first signs of a milk price recovery?