There is a bit of positivity in the dairy markets this week, as the results from the latest Global Dairy Trade (GDT) auction on Tuesday were up by 1.5%.
The fall in skim milk powder (SMP) prices in the last couple of auctions was halted, as the product saw a 2.8% increase in value to an average of €2,830/t.
The positivity for powders continued, with butter milk powder jumping by 10.5% and whole milk powder (WMP) lifting 1.6%.
Butter prices were back slightly at €4,641/t, a fall of 0.6%, and cheddar, which had dropped a massive 12.3% in the last auction, was down a further 6.5% to €3,138/t.
European trends
The trends in the European market were different in relation to butter and cheddar, with the spot prices rising by €25/t and €45/t respectively.
SMP remained steady at €2,885/t, while WMP saw a lift of €60/t.
It seems that weather is to thank for the increases in European spot market prices, as supply from some of Europe’s biggest producers – the likes of France, Germany and the Netherlands – is down.
Processors in those countries have noted a reduction in milk intakes to the plants as a result of the recent hot temperatures, with some market analysts speculating reductions as high as 10%.
Although crop and silage harvests in the first half of the year were good in most European countries, the recent heatwaves have affected the growth of both grass and maize.
If the situation persists in Europe and crop harvests are impacted, it’s very possible culling rates will rise, signalling a halt to the oversupply in the milk markets.
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