Overall, the Global Dairy Trade (GDT) index was up a fairly significant 2.5% this week.

Again, it was powders that did most of the heavy lifting, with skim milk powder (SMP) up 3.4% to €3,541/tonne (t) and whole milk powder (WMP) up 4.4% to €3,350/t.

However, butter and cheddar markets were back. Butter was down 0.4% to €4,206/t while cheddar was well back, down 7.4% to €3,247/t.

ADVERTISEMENT

Butter on the GDT is still trading ahead of European butter.

The price for European butter is €3,650/t, almost €550/t less indicating lower demand for butter in the EU.

Cheddar prices are more stable in European markets and trading in almost the exact opposite fashion to butter prices. Cheddar on the GDT is almost €550 less than European prices.

The amount of cheddar and butter traded on the GDT is low when compared with SMP and WMP, so the fall in prices is not as concerning.

Powders

In terms of powders, SMP and WMP are both now trading at the highest level they have been all year, with SMP in particular nearly back to the same levels as 2022.

There is still very strong demand out there for powders, which is of benefit to the Irish dairy industry. In recent years between 12% and 18% of the Irish milk pool has gone into SMP production.

With good news across dairy markets, it seems farm gate prices are lagging behind to some extent.

Global milk supply still needs to reduce in order for prices to really lift, but price increases have been slower than expected in recent months considering better market return, particularly for proteins.