Europe Optimistic Amid Current Global Milk Price Drop

This week has seen a sharp drop in global Whole Milk Powder prices - down 7.1 per cent to $2,229 per tonne

This marks a drop in prices of more than 50 per cent since the beginning of the year.

According to Dairy Australia, the sharp drop in prices overshadowed any positive moves for other products.

Butter and Anhydrous Milk Fat continued to gain in price rising by 7.3 per cent (to $2,849/tonne) and nine (to $3,817/tonne) respectively.

Skimmed Milk Powder also saw significant rises – up by 5.7 per cent to $2,423/tonne, although European sellers and India’s Amul saw falls.

The total average Global Dairy Trade price was down by 1.1 per cent to a $2,513 average.

In the rest of Europe, the recent European Commission medium term outlook report showed there were favourable prospects for the EU dairy industry.

However, cost-competitiveness will be key in influencing which regions see the most growth.

For the UK the forecast is that the potential for Europe will mean good market prospects for the UK as well.

Global consumption is expected to increase as a result of growing middle class urban populations, leading to increasing global imports over the next decade.

The report anticipates that those regions best placed to compete in this expanding market will be those which have invested in processing capacity and with lower production costs.

Regions identified as having increased production significantly over the last decade include Germany, France, Poland, the Netherlands, the UK, Ireland and Denmark.
In Ireland the Irish Farmers Association is looking for ways to support the dairy sector through the coming year, as it foresees some tough times ahead.

Sean O’Leary chairman of the National Dairy Committee added: “2015 will be tough on dairy farmers, with poor prices, superlevy fines and tax liabilities seriously disrupting normal cash flow.”