This week’s Fonterra auction confirmed a 1.2 per cent decrease in the overall recorded price index. All the major dairy commodity prices fell, with the exception of Butter Milk Powder (BMP), which rose 3.1 per cent.

The average price for all products across all contracts now stands at US$5,016/tonne. But perhaps of most significance to Ireland was the fact that the average butter price fell by 3.8 per cent on the last auction, to $4,586.

WMP (Whole Milk Powder) averaged US$4,999/tonne across all contracts, down 0.3 per cent on the last auction while the weighted SMP prices were down 0.1 per cent from the previous auction, at US$4,780/tonne.

The price for cheese was down 1.7 per cent on the last auction, at US$4,845/tonne. AMF (Anhydrous Milk Fat) decreased by 4.5 per cent on the previous auction, to an average of US$5,314/tonne. Prices for Casein averaged US$11,461/tonne, down 3.5 per cent from the previous auction. The Global Dairy Trade-Trade Weighted Index showed a 1.2 per cent decrease compared to the previous auction.

Commenting on these results ICMSA’ Dairy Committee Chairman Pat McCormack told AgriLand that the drop in butter price is giving cause for concern.

“The next couple of auction will set the tone for Irish milk prices this summer,” he said. “Yes, powder prices are still riding high. But it’s equally important that butter returns should be equally buoyant. Butter is a fundamentally important component of the dairy mix produced in Ireland.

“Butter returns fell by almost four per cent at this week’s auction. This trend has also been mirrored on the Dutch trading markets. It’s too early t say if this is the start of a trend, where butter is concerned. Let’s hope not.”

The next Fonterra auction is due to take place on Tuesday 4 March.