Analysis Dairy
Dairy prices down on Global Dairy Trade
The weaker picture in the dairy market is also reflected in the Global Dairy Trade which took place today (October 4). After two price increases in a row, the trendsetting dairy auction is now in the red. The butter price in particular is getting a significant boost.
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Last week it was already noticeable that the mood was changing on the European dairy market. The Global Dairy Trade is also quite negative. With a decline of 7% to $4.983 per tonne, the butter price stands out. This means that the butter price has fallen to the lowest level in a year. The gains made during the market rally in recent months have therefore completely evaporated. The supply contracts for 2023 are not necessarily much lower. This is an indication that the bottom has not gone under the butter market.
The cheddar price also clearly takes a step back and drops by 3,8% to $4.966 per tonne. The same applies to whole milk powder with a price drop of 4% to $3.573 per tonne. With a decrease of 1,6% to $3.497 per tonne, the price decrease for skimmed milk powder is the smallest.
Weak undertone in the market
The increasing trade volume is showing an increase again and is again above 30.000 tons. Yet the aftertaste of the first auction session in October is that the dairy market cannot hold on to the high prices. This is mainly due to a lack of perspective on the demand side, where high inflation is a concern in many countries. Dairy major China also buys significantly lower volumes. The milk supply in the price-setting countries is still limited for the time being, and concerns about high inflation weigh more heavily.