World dairy prices remained under pressure in October
World wholesale dairy prices remained under pressure in October, according to DairyCo. Milk production in the Northern Hemisphere was heading towards its seasonal trough, although at higher levels than in previous years, while dairy production in the Southern Hemisphere reached its peak.
With regard to butter, prices in the US fell 11.5% in October, down from the high of $6,289/t seen in September. An increase in cream supplies reduced prices in the middle of October as buyers held off in anticipation of lower prices. The decline in EU butter prices slowed somewhat during October as a result of a slight increase in demand, dropping by 1.2% to $3,738/t. The Euro weakening against the Dollar created some export interest in the latter stages of the month. Oceania wholesale butter prices fell to $2,863/t, down 4.4% compared to September.
The price for US Skimmed Milk Powder (SMP) increased to $3,285/t in October, up $40/tonne (1.2%). According to DairyCo, this increase was reported to be largely driven by sturdier demand from Mexico in the early part of October. In contrast, EU SMP prices decreased 3.7% to $2,588/t in October as supply continued to increase. SMP prices in Oceania fell 4.9% to $2,694/t during the same period.
US Whole Milk Powder (WMP) prices fell below the $4,000/t mark in October to $3,810/tonne, down 10.2% on the previous month. Average EU WMP prices fell to £3,031/t, down 2.8% over the month. European production of WMP is being restricted to orders, which has largely come from domestic buyers as export interest remained limited in October. There is also evidence, according to DairyCo, that WMP manufacturers are diverting milk to other markets and simply producing to order.
Wholesale prices for cheddar in the US fell 2.4% during October to average just over $5,000/tonne. Cheddar production appeared to be fairly strong through October, while demand was mixed with some buyers actively negotiating and others remaining distant.