News Milk
Dairy futures are booming worldwide
The dairy market is reacting somewhat calmer to the war in Ukraine, among other things, than the grain market. So prices are also going up a bit more slowly. Yet here too the products are steadily becoming more expensive, to levels that until recently were considered impossible. The futures market is leading the sentiment.
Read this article?
Become a subscriber and get instant access
Choose the subscription that suits you
Emotions are at their highest in the global futures market for butter. The cash settlement was due on February 8 the EEX at €6.005 per tonne. In the weeks before, the price had fluctuated somewhat up and down and €5850 had sometimes been quoted. Historically speaking, not a low price either.
A month later, prices appear to have risen considerably and almost €400 has been added to the price per tonne. In addition to existing concerns about tight milk supplies and relatively small product stocks, there were additional concerns about trade disruptions due to the war in Ukraine. These also drive up dairy prices even further.
The same happened in New Zealand NZX, where the price in euros is also close to €6.400.
The price of butter rose the fastest in the United States, but the price of a futures contract for butter is still slightly lower than in Europe or New Zealand. It came up in a month the CboT (Chicago Board of Trade) about €1.000 per tonne and butter futures now trade at €5.624 per tonne. This can largely be attributed to the sharply reduced butter stocks and good demand for butter and cream.
Skimmed milk powder is a little slower than butter. At the beginning of February, the cash settlement on the EEX was also not at a record at €3640 per tonne. In January, almost €25 more was recorded. In the following month, the price level rose steadily and a price of €3.900 is no longer far away. Yet this price increase of around €240 per ton pales in comparison to what happened on the butter front.
The NZX in New Zealand saw a similar price increase, although the price did not rise at quite the same pace.
Finally, in the US, the futures market for nonfat dry milk (NDM) appears to be a little more hesitant and the price has moved very little over the last month. In January, on the other hand, the futures market for NDM powder had risen very sharply.
