For the first week in over a month, milk commodity prices remain relatively unchanged.
Skim milk powder, whole milk powder and butter held steady, with no positive or negative news to report. Cheddar is the only commodity to get a lift, going up €100 to €3,650/t.
Stability is better than bad news, but no doubt farmers and processors would have liked to have seen the recent upward trend continue.
Attention in European dairy markets is now turning to whether farmers will have sufficient feed to maintain milk production through the winter.
In France, forage maize production is forecast to fall by 30%, while grass growth at the end of August was 36% below the long-term average following the summer drought.
The problem stretches beyond France, with the EU maize harvest forecast at just 50 million tonnes, its lowest level in two decades and 20% below the three-year average.
Strong supply
Despite all this, milk supplies have remained stubbornly strong up to this point.
While some processors reported declines in milk intakes of close to 10% in August, official EU production figures for July were strong, estimated at 2.3% ahead of last year.
Ireland was one of the few countries to reduce production, with July figures back 2.2% on last year.
Official figures aren’t in yet, but it will be interesting to see how August supply stacks up, as this is when the drought really began to affect farms.
Reduced forage availability is also bound to put pressure on European production over the coming months as cows are housed and farms become reliant on winter feed stocks.
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