Wholesale dairy prices drop as demand softens
According to DairyCo, EU and Oceania wholesale dairy prices across all products decreased in April as demand softened over the month. Reducing demand also affected US powder prices while the US fat markets increased over the month due to health demand. Production across the regions is performing well, especially in Oceania as production heads towards the trough
Butter prices fell on average by 3.9% between March and April to $4,407/tonne. The Oceania butter price fell 13.8% over the month as, despite tight stocks, demand fell. Russia has all but left the Oceania market and Asian/Middle East buyers have maintained a steady interest. EU butter prices fell marginally over the month, down 0.6% to $4,881/tonne. Prices have been supported somewhat by various Spring holidays, although the strong Euro is having a negative impact on export interest. Trade is also thin as sellers are reportedly not inclined to reduce prices too much while buyers are anticipating an increase in supply causing price reductions. Conversely the US butter price increased 3.6% to $4,239/tonne. Both domestic and export demand were healthy in April, while butter production remains stable.
The average Skimmed Milk Powder (SMP) price was $4,315/tonne, a reduction of 6.9%, with all three regions experiencing decreases over the month. Oceania SMP fell to $4,306/tonne (11.9%), EU SMP fell 5.1% to $4,188/tonne and the US saw a reduction of 3.4% to $4,451/tonne. All prices were subject to a reduction in global demand and increases in supplies.
Whole Milk Powder (WMP) averaged $4,658/tonne a reduction of 4.3%. Oceania WMP price fell 9.8% to $4,350, the lowest price in over a year. EU and US prices also fell over the month to $4,900/tonne and $4,725/tonne respectively (2.6% and 0.5%). It has been reported that China remains distant from the market providing a considerable lack of demand compared to majority of 2013/start of 2014.
Average cheddar prices decreased slightly to $5,033/tonne, down $18/tonne between March and April. US Cheddar prices rebounded from the reduction between February and March. The price for April increased 3.8% on March to $5,191/tonne. Domestic demand is healthy with export demand stable. Oceania prices fell 4.4% to $4,875/tonne due to a reduction in export demand.