The big shock at last week’s Global Dairy Trade (GDT) auction, where the index fell by 6.9%, doesn’t seem to have had much of a contagion effect on dairy markets. The prices on the European market this week, reflected in the graphs, show a stable trend.
The big shock at last week’s Global Dairy Trade (GDT) auction, where the index fell by 6.9%, doesn’t seem to have had much of a contagion effect on dairy markets.
The prices on the European market this week, reflected in the graphs, show a stable trend.
Butter is back €20/t, but prices are still high and stable. European cheese continues to perform well and increased in price by €25/t this week.
Meanwhile, whole milk powder (WMP) and skim milk powder (SMP) are showing very stable prices, with no change in the last week.
On the face of it, this is good news, as it indicates that the GDT was an outlier event. However, looking at the results from the GDT pulse auction this week and the downward trend in powders seems to continue, with both SMP and WMP prices at the pulse auction €53/t and €57/t lower respectively than the last GDT auction.
Having said that, the value of the pulse auction as an indicator of market sentiment wouldn’t be that strong.
The quantity of product sold at the pulse auctions has been low and it seems it’s more suited to forced sellers than those looking for value.
The fundamentals of the dairy market are still strong. OK, production is up for Europe as a whole this year, but it’s back globally and back strongly in the US and New Zealand – two key exporters.
Ornua issued the purchase price index (PPI) for June this week and that is showing a good increase, up to 140.8, an increase of 5.2. This equates to a milk price excluding VAT and including the Ornua value payment of 42.38c/l.
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