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Weekly dairy market update (4 - 7 May)
Thursday, 7 May 2020
By Patty Clayton
Although we appear to be very near the peak in production, the market has not moved significantly from last week. The active reduction in production by GB farmers, strong retail sales, the relaxing of lockdowns in some EU countries, and the opening of PSA have all helped to improve the supply/demand balance on the market.
Spot milk prices moved down slightly through the week on the back of higher availability. Early in the week, prices in the 20ppl range were obtainable, but this dropped closer to 15-16ppl as the week progressed.
Cream was readily available, but improved demand helped prices move up through the week. Trades were reported in the range of £0.90/kg - £0.98/kg.
More buyers have returned to the market, increasing demand for the second half of the year, although demand recovery is said to be gradual and slow. The opening of PSA will also have added some support to the markets, shifting buyer expectations on stock availability.
Trade in bulk butter improved this week, supported by both domestic retail demand and more interest from the continent. Quoted prices ranged from £2,350-£2,450/tonne with buyers reported to be more active.
Skim milk powder (SMP) prices remained stable, at £1,650/tonne on average. Buyers remain bearish due to the expectation of plentiful stocks, although PSA has added some support with manufacturers able to take some stock off the market.
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