Global dairy markets continued their push to the upside this week with the European dairy quotations seeing big gains and Global Dairy Trade (GDT) also getting back to positive ways, according to multi-national financial services firm StoneX.
Outlining the latest market movements to Agriland, Dr. Peter Meehan, senior commodity analyst at StoneX said:
“Here in Europe, the spot butter index jumped by almost 9% over the last two weeks moving to its highest level since 2018, while the skim milk powder (SMP) quotation was up by more than 5% over the same period, climbing to its highest level since April 2014.
“European dairy derivative markets have seen similar price support over the last couple of weeks with EEX butter futures for six months up 4% since early October, while EEX SMP is up just under 6% over the same period.”
This week’s GDT auction also saw good gains with the overall index up 2.2%, driven higher by price increases for WMP (+1.5%); SMP (+2.5%); AMF (+2.5%) and butter (+4.7%).
Global dairy markets
Dr. Meehan also pointed out that: “Strong demand and weaker milk supplies have been the drivers behind the continued price strength.
“European trade data showed dairy exports for August up 4% on last year with butter (+15%); SMP (+4%) and cheese (+10%) pushing volumes higher.
“Milk supplies data for August meanwhile show collections for the five big global dairy exporters up 0.5% which is close to the level of growth reported in July and despite posting a new record for the month, well down from the year-on-year gains reported earlier in the season.”
Continuing, Dr. Meehan said:
“Increases for Europe (+0.7%), the US (+1.1%) and Argentina (+3.9%) more than made up for declines for New Zealand (-4.8%) and Australia (-3.7%).
“The gains for European collections came about despite some mix numbers across the individual countries with Germany, the UK and the Netherlands who combined, accounted for more than a third of the August supplies all saw year-on-year declines for the month.
“The expectation is that milk collections will be a bit lower moving into September as soaring energy and feed costs put a squeeze on farmgate margins despite the strong milk prices,” Dr. Meehan concluded.