A marked improvement in dairy commodity markets is fuelling calls for increased farmgate milk prices for May supplies. Butter prices have improved by almost 15% or more than €800/t since the start of May, with Dutch spot markets reaching €6,680/t. Similarly, quotes for skim milk powder (SMP) and whole milk powder (WMP) have hardened by 4% and 5%, respectively.

SMP is now selling for €2,470/t on Dutch spot markets, with WMP on €3,760/t.

Industry sources attributed the lift in dairy commodity prices to an acceptance on the part of international buyers that global supplies were “not bulletproof” and were not going to improve in the medium term.

Weak demand was being trumped by an even weaker supply outlook, another industry insider commented.

ICMSA dairy committee chair, Noel Murphy, said the recent increases in dairy commodity prices equated to 5c/l.