There were some positive signs in the dairy trade this week, with a rise in prices at both the Global Dairy Trade (GDT) auction and the European spot market.

Before we get too excited, the quantity traded at the GDT was very low at just under 19,000t when it would normally be closer to 30,000t, albeit coming to the end of the New Zealand season.

Prices were up though and that’s the key thing, with whole milk powder (WMP) rising by 3.4% and skim milk powder (SMP) rising by 1.4%. There was gains for butter and anhydrous milk fat also.

The spot price for butter in Europe also increased this week, rising by €85/t to €5,690/t, arresting some of the sharp declines experienced over the last few weeks.

WMP declined by €10/t, while SMP increased by €35/t, with news that EU exporters won a substantial tender for SMP to Algeria.

Across the EU, milk supply for January was back 0.9% and according to the Milk Market Observatory, the main reduction in production across the EU was for butter and SMP in January, with SMP production back 9% and butter back 4.2%.

Production of WMP, cheese and fermented milk all increased for January.

It’s difficult to predict where prices are going. The more positive sentiment this week is a good sign because at least the drops experienced over the last few weeks have been halted.

Demand remains weak and even lower supply expectations (AHDB is predicting British supply to be back 1.1% in 2024) is doing little to entice more buyers.