A combination of lower New Zealand milk production compared to last year, firming European butter and cheese prices and an Irish fodder shortage is going to make March a critical month for Irish milk prices.

The ongoing fodder shortage has prompted IFA dairy chair Tom Phelan to suggest that board members must be contacted by all dairy farmers this week to lobby for no adjustments to March milk price.

He said: “Members from all regions have reported that they are having to supplement feed at very high cost as fodder stores have been depleted as cows were brought in early last autumn. Without any price cut at all, farmers will be looking at a depressed milk cheque for March as milk solids are much lower than normal.”

This week

Spot markets show butter has jumped €300/t with some selling as high as €5,200/t on spot markets this week. The butter market has underpinned dairy markets for the last number of months and sources suggest there continues to be a very firm trade for butter and there are little or no stocks in storage.

On the cheese market there cheddar prices held steady at €3,200/t but jumps in price for mozzarella and gouda to €2,900/t and €2,700/t with strong demand. There was a slight upward price momentum in powders this week too. Whole milk powder (WMP) up €50 and trading at €2,750/t while skim milk powder (SMP) was up marginally to €1,270/t and still continues to drag down the butter skim product mix.

New Zealand

Fonterra this week announced a review of markets and it too suggests a positive slant. It suggests dairy demand in China remains strong. New Zealand milk production was back 4% in February. Chinese imports were up 20% for the 12 months to Janaury 2018 and they were up 44% in January compared to the same month last year. While the latest GDT auction result was back slightly again at the last trading event, since January 2018 the volume of product traded on the auction has fallen considerably to its lowest level (less than 20,000 t) in over a year and the weighted average price has increased to over US $3,600/t, the highest it has been for over a year.

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