Dairy markets ‘increasingly bullish’ as trader demand surges

EUROPEAN dairy markets are returning the equivalent of 32c/l on the back of the continuing recovery in milk powder prices, the ICMSA claimed this week.

Surging trader demand for dairy proteins has seen more than 380,000 tonnes of skim milk powder (SMP) sold out of intervention stores since last autumn, the farm body pointed out.

With the overhang of product removed, SMP prices have improved steadily. Dutch dairy market quotes have increased from €1,600/tonne to €1,900/tonne since November. Butter prices, meanwhile, are holding at €4,400-4,300/tonne. “We’re not surprised to see spot prices in the Dutch quotations returning over 32c/l after processing and including VAT for the butter/SMP combination. This is up 4c/l since the start of December and reinforces the ICMSA view of a market that is increasingly bullish,” said ICMSA dairy chairman Ger Quain.

Significant rises

“Similarly, the WMP [whole milk powder] returns are over 32c/l, up 3c/l in that same period. Butter price continues to remain constant, but attention is really on the significant rises in powders in the last quarter of 2018,” Mr Quain maintained.

Most Irish dairy processors held their prices at a base of 32c/l for December milk.

Meanwhile, IFA has welcomed the announcement by Glanbia of a €140m investment in a new plant at Belview to produce up to 50,000 tonnes of continental-style cheese.

The joint venture with Dutch company Royal A-Ware will be one of biggest cheese plants in the country once operational and further reduces Ireland’s dependence on the British cheddar market.

However, IFA president Joe Healy said the benefits of investments such as this had to be reflected in higher milk prices for farmer suppliers.