Similar to almost every other market at the moment, EU dairy is seeing extreme volatility as prices have moved sharply lower.

This was the message from John Lancaster, head of EU dairy consulting at INTL FCStone. INTL FCStone is a multi-national financial services firm that trades globally in all asset classes.

Speaking to AgriLand, John commented: “The past week has seen the spot butter quotations pull back by a further 1% and the spot skim milk powder (SMP) quotations by 3.6%.

“With the level of uncertainty over what’s going to happen with the spread and response to Covid-19 (coronavirus) over the next six months, the European Energy Exchange (EEX) dairy futures saw a more significant pullback.”

He continued: “The front six months of the butter forward curve moved down by 3.5% and the front six months of the SMP forward curve moved down by 7.7%.

“This continues to be a global story, with US and Oceania dairy markets also seeing significant downward pressure.”


Tuesday’s Global Dairy Trade (GDT) painted a similar picture, with the GDT price index falling for the fourth consecutive time.

The most dramatic move on the day was for skim milk powder (SMP) which plummeted by 8.1%, while whole milk powder (WMP) dropped by 4.2%.

Image source: Global Dairy Trade

However, on the flip side, lactose (LAC) saw a rise of 4.9% in index on the day, with index rises also recorded for cheddar (Ched), rennet casein (RenCas) and anhydrous milk fat (AMF) – which saw increases of 2.6%, 1% and 1% respectively.

Butter also saw a marginal rise of 0.3% on the day.

The current GDT figure of 929 is the lowest the index has been at since January 2019, though still higher than figures recorded in November 2018.