European dairy markets continue to power ahead, with butter once again leading the charge, increasing by €90/t to hit €5,630/t, which is the highest price in over 12 months.

Whole milk powder (WMP) increased on the spot market this week too, rising by €60/t to hit €3,720/t. Skim milk powder (SMP) fell this week by €20/t to €2,620/t.

There was better news for cheese prices with a tonne of cheddar increasing by €75/t to hit €4,200/t. The increase in cheese prices will be welcomed by the co-ops specialising in this, after 12 months of dismal demand.

The last Global Dairy Trade (GDT) auction was flat with no change in the index, but there was some movement in powders at this week’s pulse auction.

WMP was down 1.5% compared with the last big auction, while SMP was down 4% . The next big auction is next week, so more will be known then. These pulse auctions haven’t been a very reliable indicator of trends in the past.

Interestingly, there is a big cooling off of butter prices in the US, with quotes down 15% compared with two weeks ago.

Prices are still over €800/t higher than they are in Europe at present.

Meanwhile, milk supply in New Zealand is trending downwards, at least for now, with supply down 1% between June and September. This is due to a wetter than normal spring.

Overall milk supply in Europe is up 0.5% to the end of September, driven by increases in Germany, Netherlands and Poland, but supplies have fallen sharply in these areas since September.