Global dairy prices climb

Prices increased by 3,2% at the latest GlobalDairyTrade auction held on 16 May 2017. This is the fourth increase since March 2017. The GlobalDairyTrade trade-weighted index is currently at 1 089, 53% higher than in January 2016. Prices are back to the peak levels reached in December 2016. All prices, with the exception of rennet casein, had increased since the previous auction.

Butter prices increased by 11,2%, thereby continuing the increasing trend in butter prices. European private butter stocks decreased from 100 000 tonnes in June 2016 to fewer than 5 000 tonnes in March 2017. Cheese stocks are also substantially lower while milk powder stocks remain stable. Milk production growth in major exporting countries remains subdued with negative growth in 2016 and the first quarter of 2017 in Australia and Argentina. New Zealand production increased by 3,2% in the first quarter of 2017. In the EU, growth slowed down from 0,3% in 2016 to -1,2% in the first quarter of 2017.

Slow production growth, as well as the recovery of demand, will probably result in positive international product price trends in coming months.