Latest EU dairy price trends

According to DairyCo, EU wholesale dairy prices are starting to fall as milk production continues to perform well. There is indication that buyers are limiting cover to short term requirements, waiting to see what impact the flush will have on prices before committing mid- to long-term. The euro strengthening against the Dollar has also contributed to prices falling as EU exports become less competitive on world markets

Butter prices reduced for the seventh month running, falling 1.9% on average between February and March. Prices are still relatively high, 5.2% higher than last March, and buyers appear reluctant to cover anything other than short term demand as the EU strides towards the flush.  However, with no PSA it is harder for traders to judge stocks.

Skimmed Milk Powder (SMP) prices fell by 5.8% on average over the month, put under pressure as export demand has softened and manufacturers are nearing production capacity. It has been reported that buyers in China have backed off slightly from the market following intensive buying early in 2014. While prices are declining, other countries appear to only be covering short term requirements.

Whey powder fell to €938/tonne (down 5.8%) between February and March. An increase in Cheese production has allowed for more supply of whey placing pressure on prices.

Cheese prices fell marginally over the month, 0.7%, as production increases. However, demand from Russian is continuing to provide support for the market.

Meanwhile, February saw UK Dairy Product Retail Price Indices (RPI) increasing by 1.6 points compared to the previous month and remains higher than at the same point last year. The butter price index saw the largest change among the dairy products, increasing by 19.8 points from January. Both the fresh milk price index and cheese price index marginally increased from January through to February by 0.4 points and 0.8 respectively.

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