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Wholesale markets for dairy products fell, says AHDB

Staff Writer | February 7, 2018
Wholesale markets for dairy products fell further in January, although demand re-appeared in the latter part of the month, helping to stabilise prices.
dairy products
Dairy   SMP prices remain impacted by stock pressures
Unsurprisingly, skim milk powder (SMP) prices remain impacted by stock pressures, while butter prices saw a drop of around 9%.

The average value of milk (EU AMPE) fell by 8% compared to the previous month as a result.

Pricing on futures markets was less ‘bearish’ with prices for SMP and butter contracts expiring in the spring (Apr-18 and May-18) remaining relatively stable.

There was even some upward movement in contract pricing in the final weeks of January. The average value of milk on the futures market (FMPE) therefore rose marginally (1%) compared to December.

The FMP indicator for January, while still negative, improved from December. The negative value suggests an expectation for some downward price pressure as supply dominates demand.

However, the improvement in the value of FMP alludes to an expectation that the additional milk will not overwhelm the market, but rather be needed to satisfy demand and stock rebuilding.


 

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