Both commodity prices and August milk price announcements have flattered to deceive over the last couple of weeks.

Starting with farmgate prices, the majority of Irish co-ops have now announced their August prices and they are unimpressive to say the least. Where there have been increases, they are small, running between 0.5c/l and 1c/l excluding VAT.

This suggests there is still hesitation from processors about the future of the market.

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There is no guarantee the El Niño weather pattern will have a big impact in New Zealand and until European supplies fall, markets remain well serviced. This seems to be the mindset processors are adopting.

If anything, milk supply is increasing again in countries that had been suffering a drop during the drought.

Commodity prices are also feeling the pinch from increasing milk supplies.

Three of the four commodities are down this week, with whole milk powder (WMP) the sole green arrow. It was up just €25/tonne to €3,775/tonne.

Butter, cheddar and SMP all had relatively small reductions in price.

The bounce over the last six weeks provided room for optimism among farmers, but milk production has recovered well and year-on-year figures still look set to increase in many countries.

Until these figures start to settle, prices are likely to be slow to lift.

As mentioned in previous weeks, the expectation is that it will be closer to Christmas and into the new year before fodder shortages and poor crops hit herds across Europe and show up in lower milk output and cow numbers, if they even show at all.