Futures market indicator

Updated 17 January 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.
  • Butter prices on EU wholesale markets increased by 0.5% in December while SMP prices rose 3.3%, supported by tight supplies and good demand.
  • As a result, EU AMPE rose 0.88€c/l in December compared to the previous month.
  • On the futures market, settled prices for April SMP contracts fell through the month, while butter contract prices rose.
  • Overall, the future milk price equivalent (FMPE) rose by a marginal 0.4% (0.16€c/l) in December.
  • The forward market performance indicator (FMP) remained positive in December, but was down from the previous month.


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

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