US milk record dampens Global Dairy Trade

For the second auction in a row, the milk powders show an opposite picture. Whole milk powder saw a sharp decline of 3,3% to $3,022 per tonne. That is a signal that the leading commodity of the dairy market is again in a downward trend. The next auction will show whether the quotation can hold above the limit of $3,000 per tonne. The question now is whether the quotations of whole milk powder in Europe and the US will be affected by this. Prices usually move up fairly evenly.

Butter continues to rise
Skimmed milk powder rose 1,4% to $2,218 per tonne. The listing thus strengthens the position above the $2,000 per tonne limit, which was traded in the first half of last year. Butter rose 2,9% to $5,768 per tonne. An unprecedented level, because prices above $5,000 per ton have never been recorded in the past.

The July and August contracts are even trading above $6,000 per tonne. The plus in New Zealand probably also provides scope for further increases in Europe. After a series of price increases, Lactose this time recorded a significant minus of 11,1% to $869 per tonne. On balance, the average price fell by 0,6% to $3,434 per tonne.    

American milk supply up
The moderate sentiment at the dairy auction is a response to the plus that the American milk pool writes for May. Dairy farmers in the US produced 1,8% more milk last month, compared to the same month last year. This means that the milk supply in the US is over for the first time the limit of 8 million tons of milk, a plus that results from higher productivity per cow and a larger herd.

On the demand side, there are uncertainties as to whether China will remain in the market for whole milk powder. Especially now that Chinese people are increasingly focusing on buying butter.    

The milk supply in the United States, per 1.000 tons, for the period 2003 to 2017.