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EU wholesale dairy prices in November remain mixed

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Staff Writer | December 12, 2018
SMP
World   Prices are being supported by buyers paying to get deliveries this year

Results were mixed for EU wholesale prices in November. SMP and whey were both up on the month, WMP and cheese were marginally down, and butter continues to fall.

Most EU countries had their seasonal trough in production this month. In New Zealand production generally peaks in November, and strong supplies have kept some prices lower than the EU, limiting interest in EU exports.

Butter prices fell 5% in November, further reducing its premium over other regions.

Although it is an in-demand product at this time of year, most contracting for the year end is already sorted and production is reportedly keeping pace with buying interest.

igher prices compared to other regions over the last few months have dampened interest in EU exports, so production is mainly going towards satisfying the domestic market.

Demand for SMP has been more active. Most internal EU activity is focused on Q1 2019, and sellers have had some success demanding higher prices – but many are still negotiating.

Prices are being supported by buyers paying to get deliveries this year. There has also been some spot market export activity, which has added some extra support to SMP markets.

Additionally, the EU has now sold just over half of the intervention stocks. WMP is relatively stable, with production focused on satisfying domestic demand; lower prices in Oceania are limiting export interest.

Cheese prices had mostly marginal shifts, with the exception of Cheddar which was down 3% on October.

Internal demand for cheese was reported as strong for November, with retailers ordering in preparation for holiday demand. However, production has also been up on last year. UK production of Cheddar from Jan-Sep was up 6%, suggesting that extra supplies may be putting some downwards pressure on Cheddar compared to the other cheeses.


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