There was a sharp fall in European whole milk powder (WMP) price last week, with the DCA dairy benchmark price for week 30 down €150/tonne on the previous week to €4,085t.
This is the biggest weekly fall so far this year and the lowest level since the middle of August last year.
From then until the middle of January, there had been a steady rise in the value of WMP, reaching €4,400/tonne in the middle of January. Since then, prices had remained steady prior to the sharp fall last week.
DCA market intelligence analysis points out that despite the recent decline, values remain ahead of past year.
However, it also notes that recent trends suggest a possible turning point and if these continue, it could be that the gains from late last year may be lost completely by September.
It also suggests that at an EU level, the WMP sector is facing “a convergence of structural and competitive pressures”.
Production falling
It points out that production is falling in the EU, which raises questions about production capacity.
Exports have been in decline and international competition is intense in the whole milk powder category, especially from New Zealand.
Returning to dairy prices, butter values also fell again last week, down to €7,060/tonne, which is the lowest since the middle of February.
It is a similar trend with cheddar prices, with a €25/tonne drop to €4,525/tonne, the lowest value this year having reached €4,940/tonne in March.
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