There was a bit more confidence in the European milk market scene this week, with particular buoyancy in the butter market, with prices shooting up by €260/t, eroding all of the losses of the previous five weeks.

The jump in butter prices makes sense and brings European butter back closer in line to the US and Oceana prices, both of which were leading the EU price.

In terms of powders, there wasn’t much movement for whole milk powder (WMP), dropping by €10/t, while skim milk powder (SMP) fared a bit better, increasing by €50/t.

Cheddar also registered an increase in price, rising by €45/t to hit €4,065/t which is still over €150/t behind its recent peak in December.

The higher prices in Europe was in some way a result of the better than expected Global Dairy Trade (GDT) auction last week, which saw the index increase by 4.2%.

Again this week, the GDT pulse auctions saw gains in both SMP and WMP, which is positive, although the price gains are really only rising to match the gains at the main auction held last week.

There is some talk that the disruption to trade routes in the Red Sea is having an impact on European dairy demand, as Asian buyers are giving preference to product from Oceana.

Either way, the big player China is still more or less out of the ring when it comes to WMP, buying about 25% of what it normally buys at the GDT. GDT forward contracts for WMP continue to rise at each auction, giving greater confidence on milk price, at least at that side of the world.