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Futures market indicator

Updated 15 April 2020

This indicates what those trading futures believe the supply and demand relationship could be over the coming months, based on how futures market returns compare to current markets.
  • The impacts of coronavirus are putting downwards pressure on European dairy markets.
  • EU (ex UK) wholesale butter prices were down 3% on the month in March, while SMP prices were down 9%. This led to an overall decrease in EU AMPE of 7.4% compared to February.
  • On the futures market, movements settled prices for July SMP contracts were somewhat variable for both butter and SMP, but with the overall trends going sharply down.
  • Overall, the future milk price equivalent (FMPE) fell by 13% (4.86€c/l) in March.
  • The forward market performance indicator (FMP) became more strongly negative in March.


Frequently asked questions

What is Forward Market Performance (FMP)?

It is the market indicator we use to monitor the difference in current market prices and prices traded on futures contracts. It aims to show what those trading futures believe the supply and demand relationship could be over the coming months.

How is it worked out?

The FMP is a comparison between Actual Milk Price Equivalent (AMPE) and a Future Milk Price Equivalent (FMPE) price. These are quoted in Euros as there are no Sterling futures prices.

Actual Milk Price Equivalent (AMPE) is a market indicator for the dairy sector to provide broad, general estimates of market returns from producing butter and SMP.

FMPE also estimtes market returns from butter and SMP, but is based on futures prices from the European Energy Exchange (EEX). It should be noted that trade over the futures market is very slim and therefore these figures should be viewed as one indication of the market movements and not actual developments.

What does it mean?

FMP does not tell us how much milk prices will change by. However, it can suggest possible trends in prices.

FMP is the relationship between AMPE and FMPE. It is about the traders’ views of the potential supply/demand relationship in the future.

A negative figure would suggest traders believe there could be relatively high supply – so the market will become supply-focused. A positive figure would suggest traders believe supply could become tight – forcing the market to become more demand-focused.

Additional information

*FMPE is 4 months in advance of AMPE

From Jan-20 onwards the EU AMPE value is for EU (ex UK). Prior to this an EU-28 AMPE is used.     

If you would like to know more about Futures, please download our Back to Basics Risk Management factsheet.

Download the Back to Basics Risk Management - Futures factsheet