World dairy market update
DairyCo is reporting that Global milk production continues to perform well helping to rebuild stocks. Butter prices have held firm in the US and Oceania, due to good demand, while EU prices continue to decrease. A reduction in global import demand sees average powder prices fall on average in March.
Average butter prices increased marginally by $5/tonne in March to $4,587/tonne. EU butter prices continued to fall towards world levels, down 1.5% to $4,913/tonne. With prices remaining above global competitors and the Euro strengthening relative to the US dollar exports has been under pressure. Meanwhile, US butter prices increased $53/tonne to $4,092/tonne, up 1.3%, due to fairly tight supplies and healthy demand, both domestically and internationally. Oceania prices also increased over the month to $4,756/tonne (up 0.8%). Import demand is reported to be mixed as some buyers remain active however some appear to be holding off, anticipating that further increases in global supplies will place downward pressure on prices.
Both SMP and WMP average prices fell over the month, by 2.0% (to $4,636/tonne) and 2.3% ($4,868/tonne) respectively. WMP prices in Oceania fell below the $5,000/tonne mark, down 5.6% to $4,825/tonne while SMP prices fell by 2.0% to $4,888/tonne. EU prices also declined although SMP saw the larger drop, down 4.5% in March to $4,413/tonne. WMP prices in the EU fell 1.8% to $5,031/tonne. Global demand, especially from China, has been reported as softening through March placing downward pressure on powder prices. The EU powder markets have also been affected by strong milk production and capacity issues.
US powder prices were the only ones to increase over the month, largely due tight supplies and steady domestic and international demand. The average price for US SMP for March was up 0.5% to $4,607/tonne while WMP increased 0.8% to $4,748/tonne.
Cheddar prices fell by 1.6% on average as good stocks in the US and reduced export interest in Oceania placed downward pressure on the market. With production picking up towards the peak in the US, Cheddar prices fell 0.8% to $5,002/tonne. While stocks are reported as building well, although domestic demand and export interest are keeping the market balanced and limiting downward movement in prices. Oceania prices fell 2.4% to $5,100/tonne as a reduction in export interest. With the Northern Hemisphere replenishing cheese stocks and the Southern Hemisphere enter the trough, export opportunities have been limited, placing downward pressure on the market.