Intervention stocks depleted to almost nothing – with rising sales price
Almost all the over 400,000t of SMP sold into intervention since 14/15 have been sold out, with recent prices keeping pace with fresh feed grade prices of around €1660-1670 (German and Dutch, 6th Feb quote). The latest minimum price adjudicated for sale of intervention powder was €1622/t on 2nd February. As the range of bids was up to €1710, some product will have sold for a higher price up to that maximum.
Remarkably, the 3,500t which were left to sell did not find buyers, only 584 tonnes were sold. Spain, the UK, Slovakia and Finland are the countries where this left-over product is stored. All Irish stock has been sold.
For all intents and purposes, the intervention stores are now as good as empty, and with restrained fresh milk supplies, the price of powder will hopefully continue to firm.
Dairy prices stable to firmer
The firming of powder and butter prices we have seen in recent weeks has continued in a more modest way.
The nominal Irish product mix whose returns we follow on the basis of the EU Milk Market Observatory weekly average price reports has improved by around 1.3 cents per litre from early January to early February.
Based on the EU MMO average prices quoted for 3rd February, the representative Irish product mix would return gross 36.1c/l before processing costs. Assuming the deduction of a nominal 5c/l for processing costs, this would be equivalent to 31.1c/l + VAT, or 32.78c/l incl VAT. This is around 0.5c/l more than the average of the FJ League for milk purchased in the month of December.
Based on EU MMO data
Spot quotes, which had stalled and eased in recent days, are also firming again very slightly for SMP and whey in early February (table below).
Source: INTL FCStone