Since May, there has been a swing in sentiment in dairy markets as strong demand for butter and cheese helped lift prices. European butter prices alone have soared almost 20%, or $530/t, in value since the beginning of May.
Milk powders are best summarized by their performance in the GDT, which has badly struggled to gain positive momentum in the last six months.
However, in its latest report on the global dairy market, the USDA has suggested milk powder prices may finally be in the early stages of a recovery. Although they remain weak overall, whole milk powder prices have shown modest but steady improvement since February, primarily due to improved import demand from China.
Weak prices
On the skimmed milk powder side, market prices remain weak and close to intervention levels but have improved 11% since early May.
The USDA says these recent increases in milk powder prices are the first sign of a “realignment of markets that are slowly coming into balance as the milk over-supply situation is corrected.”
The USDA did warn that world prices for SMP are likely to remain challenged for the rest of the year as massive overhanging stocks in both the US and in intervention storage in the EU mitigate any real price recovery.
“While prices may trend upwards for the balance of the year, this progress will probably be unsteady and will likely be hampered by the substantial stocks of SMP. Any significant recovery (in milk powder prices) appears unlikely until well into 2017,” said the USDA.
Source: FarmersJournal
Link: http://www.farmersjournal.ie/dairy-trends-milk-powder-prices-may-be-in-early-stages-of-recovery-usda-217491
