With all the market signals pointing towards higher dairy commodity prices over the last six weeks and coming months, speakers at the Dairy Industry Newsletter conference in London confirmed much of the positivity.

One of the key drivers of the optimism was the fact that just over 40,000t of skim milk powder (SMP) was sold out of intervention.

Speaking at the conference Brigette Misonne, head of livestock with the European Commission said: “At the start of the year there was over 400,000t of SMP in storage and now this is edging closer to 300,000t.

"While still a lot of powder the fact so much was sold at the last auction is very positive.”

View from the US

US speaker Phil Plourd from Bliming was also very positive on the US story and where he sees dairy commodities going.

He said there are a number of factors at play.

“Crude oil is up – globally, economic times are pretty good, US money is leaving equities into commodities so basic trends for butter, cheese and non-fat dry milk are positive, US April volumes are back and inventories of dairy product are all gone.

"So, in summary, supply growth will slow to 1% this year and demand for cheese and butter is up 2%, so it means the market will be firm and I don’t expect global surpluses this year.”

While the disconnection between fat and protein prices continues there seems to be nothing halting butter prices.

Now, other products are also registering price increases and lowest priced product (SMP) is also now increasing.

All speakers are taking part in the Dairy Industry Newsletter Conference taking place Thursday and Friday of this week in London.

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