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EU supplies down in early 2019

French milk supplies were down -3.1% in week 4 of 2019 (see graph right) and (most recent monthly figure available) down 3.7% in November 18 compared to November 17.
This is the continuation of an ongoing trend towards significantly lower output compared to previous year since the first week of August 2018.  Also, output has been consistently below the 5-year average (yellow line in graph below) since almost this time last year.

Source: France Agrimer

German milk output has also been below year-earlier for almost all of the same period (from August 2018 todate).

Between them, France and Germany account for 37% of all the milk produced in the EU 28.

Dutch milk production has fallen 2.92% in the January to December period according to ZuivelNL, the Dutch dairy industry organisation.  This is due to the restriction on the national dairy herd imposed to reduce phosphate output.  Dutch milk supplies account for a further 9.4% of EU supplies.

Source: ZMB

UK milk supplies have been increasing in recent months, rising above 2017/18 output since November.

December 2018 UK output was up 1.7%, but the April to year end output was level for GB, and up 2.3% for NI.  The UK accounts for 9.6% of EU supplies (see pie chart below).

Source: AHDB Dairy

Source: EU Commission

More dynamic countries from a milk production perspective include Denmark (up 2.5% for the full year, and 2% for December); Poland (up 2.6% for the full year, up 3% for November) and of course Ireland (up 4.3% for the full year, up 23.2% for the month of December).

Poland accounts for 7.3% of overall EU supplies, with Ireland at 4.5%, and Denmark at 4%.

So, with almost 50% of the EU’s milk output in negative growth, the EU’s milk production has been restrained in recent months, with November output down 0.8% and predictions that this trend will likely continue into spring 2019.

Global supplies: a mixed picture, but flat at back end

Global milk supplies were estimated to be up 1% for 2018, but flat at year end because the EU, Argentina and Australia are all well down.

US output was up moderately, 0.8% for November (no more recent figures due to Government shutdown) and +1.2% for the January to November period.

New Zealand production continued to increase strongly, by 2.3% for the year, and 4.4% in December alone.  However, restrictions from environmental legislation enacted by the current Labour government will likely reduce scope for growth in the medium to longer term.

Source: AHDB Dairy

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.

Based on EU MMO data

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

Returns – improvements should help hold milk prices in short term

Most of the indicators we follow on the market place have improved by 1c/l or more in the last month to month and a half.  This reflects continuous improvement in powder prices (especially SMP) and while butter prices had been easing for several months, they have been firming slightly in recent days/weeks.

The average price paid by co-ops for December milk was, based on the Farmers’ Journal milk league, 30.67c/l + VAT.  The below suggests that this would be comfortably sustainable based on current (late Jan to early Feb) returns as illustrated by a variety of Irish, EU and international indicators.

Sources: EU MMO, INTL FCStone, Ornua, GDT

CL/IFA/12th February 2019

Focus on SMP: markets recover globally as intervention stocks collapse

The positive indicators for SMP markets have continued to mount up into the New Year, the most remarkable probably being the rapid sales of increasingly large tonnages out of intervention at rising prices.  A total of 357,345 tonnes have been sold out of intervention in the period from December 2016 todate, leaving only around 22,000t in stock after a whopping 80,242t were sold earlier this week.

The minimum sales prices have been rising since last July, now practically matching fresh Dutch and German spot quotes for feed grade powder.  At €1554, the most recent minimum accepted price was about on par with the EU average spot quotes for feed grade powder quoted for 9th January 2019.

Based on EU MMO data

With very strong SMP exports out of the EU in 2018, all SMP price quotes are also on the up, from EU market averages to GDT trends, as are forward indicators such as spot quotes and futures.   Now that intervention stocks have dropped to below their March 2016 level, will we see a continued recovery in SMP prices, and a rebalancing of the butter/powder prices to more “normal” levels?

GDT SMP prices have been rising steeply in the last three auctions – albeit from very low prices – to a level of US$ 2,200 last seen in June 2017.

Source: GDT

European spot quotes for food grade SMP have also improved consistently in recent weeks, with Kempten (German), France Agrimer and Dutch PZ quotes now at €1830/tonne.  We are even hearing anecdotal trade at prices nearing €1900/t.

This is happening at the same time as significant sales out of intervention for what must by now be feed grade SMP are reaching prices that are on par with fresh feed grade product spot prices.

On 9th January, the Dutch PZ spot quote for feed grade powder was €1580/t, while the German (Kempten) quote was €1550/t – about the same as the most recent minimum intervention selling price.  While the spot market trends suggest where average market returns will become in the short term, futures deal with the medium to longer term trends.

Even futures markets are looking up for SMP, with latest EEX quotes suggest prices rising above €2000/t by the end of 2019.

Average EU market prices also reflect this same trend. In the first week of January 2019, they reached €1730/t.

It is also the improvement in the spot and market prices of SMP which caused the December Ornua PPI to increase from 104.9 points to 107.5, equivalent to a milk price of 30.55c/l + VAT (32.2c/l incl VAT).

Source: INTL FCStone

Source: EU MMO

Returns from other products, apart from whey and Emmenthal cheese, are easing

It is important to state that, while many bemoan just how much butter prices have eased since the vertiginous peaks of 2017, at around €4300 (spot) and €4450 (early January average EU price), they remain significantly above the average of the last 10 years.

This is however a significant reduction in the last 15 months, and one which has yet to be fully offset by still historically weak SMP prices, at least relative to the old equilibrium which used to prevail between the prices of those two products.

Based on EU MMO data

Whey prices have started firming in recent weeks, with spots at €790/t – though the latest available market prices for December 2018 suggested better prices than that, around €840/t.

Whole milk powder and the main cheeses, except Emmenthal,  have also experienced price weaknesses in recent months, as shown by the graph below.

Source: INTL FCStone

Based on EU MMO data

Demand outlook for 2019?

Geopolitical factors including Brexit, international trade and tariff disputes driven by the Trump Administration and concerns over the global economic growth are all worrying economic and trade commentators.

These concerns certainly affect dairy market sentiment to a point.

However, lower supplies in the EU, which have dipped into negative territory over the autumn, have continued to moderate output growth expectations from the bloc.  The EU Commission reports a likely production increase of 0.8% for 2018 over 2017, and predicts only 0.9% increase in 2019.  Their long term prediction is for moderate growth of 0.8% per annum to 2030 as environmental factors become more of a restraint in Europe.

Predictions for global milk output growth for 2019 are for no more than 1% increase, a significantly lower level than seen through 17/18.

Key of course is the supply demand balance, and supplies have trended towards better matching demand growth in recent months.  However, we will have to see the extent to which the headwinds outlined above may moderate demand.

In its Quarterly Dairy Report published in December, Rabobank predicts “double digit” demand growth from China for dairy products, due largely to excessive production costs restricting domestic output.

Rabobank also expresses the view that buyers may be taken unawares by a more rapid than expected dairy commodity price recovery in the first half of 2019, based on relatively low privately held stocks, all the more so now that the intervention cupboard is getting very bare!

Domestic dairy demand in most of the developed world remains solid enough, especially for butter and cheese which tend to be traded more domestically than on export (Ireland being an exception to this rule for obvious reasons).

Oil revenues for some emerging countries will have suffered in the last few months as crude oil prices went from near $80/barrel to around $55-60 today, and this will undoubtedly play a part in their food import affordability.

The long-term demand outlook – which looks beyond the shorter-term geopolitical difficulties outlined above – remains very positive, with global population and income growth in emerging countries expected to continue to drive dairy demand growth, in the context of more moderate global output growth.

So, stability on milk prices is well justified for now, but could we see justification before long for more positive moves by our milk purchasers?  Who knows?

CL/IFA/11th January 2019

Some real positives on dairy markets for early 2019

1 – Less milk about

Global supplies of milk have continued to grow into October, but, at an estimated +0.6%, this is at a very much more modest pace than heretofore.
Weather related fodder shortages and cost shocks continue to impact EU (-0.4% in Oct; +1.4% ytd), and Australian (-5.7% in Oct, -0.6% ytd) output.  While the US continue to show positive growth (+1.1% ytd), it is relatively modest at +0.8% for Oct.
Of the main dairy regions, only New Zealand is motoring on, up 5.8% for Oct, and up 2.2% for Jan-Oct.
Slightly less important in tonnages produced is Argentina, though Oct supplies were +2.1% – compared to a low performance this time last year – and ytd + 5.6%.
Brazil was down 0.2% Jan-Sept.

Source: USDEC

European supplies, while well down on the whole for October, show a mixed picture when one look at individual producing countries.

France, Germany and the Netherland account for, between them 46% of the EU’s milk supplies, and 51% of its dairy exports.  Those three countries are all producing less milk this back end than last year, the Netherlands at least to end the year with less milk than 2017 – France produced 4.4% less milk in October, Germany -1% and the Netherlands -5.5%.
UK milk supplies were practically static at +0.4% for October, despite very strong growth in Northern Ireland, suggesting lower output in the rest of the UK.
Finland reported losing 50% of its grass crop to the drought over the summer, so that production will be down 0.5% this year and the Finns predict it will fall a further1.1% next year.
Austria’s milk supplies are also down, and the Italians expect their milk production to fall in the last quarter of 2018.

Supplies from other countries, on the other hand, have staged a recovery after the heat wave and drought of the summer.  Ireland most of all increased October production by 20.1%, raising January to October output by 2.8%, with expectations of further significant growth in November.  Denmark is also showing some growth, while Poland continue to grow production by over 2% ytd.

Source: CLAL.it

2 – A turnaround in GDT trend?

Today’s GDT auction was the second positive one after a long stretch of price falls since last May.  Are we seeing a turn-around?  NZ supplies have increased massively in recent months, but we are now well past the NZ peak, and ahead of the Northern Hemisphere main season.  Concerns over slower and even negative supply growth in the short to medium term is clearly influencing even Oceanian price trends.

At US$3928 (€3454/t), the average GDT butter price is up 4.9% on the previous auction, but remains well below current EU average butter prices.  At $2042/t (€1796), GDT SMP prices are a little above rising EU levels.

Source: GDT

3 – More SMP selling fast out of intervention at rising prices

SMP has been open for buy-in since 2014, in the wake of the Russian embargo on all EU foodstuffs.  A total of over 405,000t was sold into intervention between 2015 and 2017.  There was no SMP accepted into intervention in 2018, and after a couple of unsuccessful tenders, operators got the message and stopped offering it in.

In 2016, 40t of SMP were sold out.  In 2017, this increased to a still modest 180 tonnes.  2018 saw the bulk of the sales, with 276,883t sold out by the last December 2018 tender.  From October, the number of monthly tender was doubled to 2, though December had only the one.

Next January, the totality of what is left in stock namely just over 102,000t, will be available for the next two tenders.

EU Agriculture Commissioner Phil Hogan has seriously suggested that the entire stock could be gone by next spring.

The most interesting aspect of the intervention sales is how they have increased in pace while the sales price has also been increasing.

Based on: EU MMO data

4 – Rising fresh SMP market prices

SMP prices have been firming progressively since mid-October, coinciding with the largest sales out of intervention (see graph above).

As at 9th December 2018, the EU MMO reported the average EU SMP price at €1670/t.

Spot quotes for SMP have also been increasing steadily for the last couple of months.  On 12th December, those had exceeded the intervention buying in level and exceeded €1700/t for the first time in months.

Based on: EU MMO data

Source: INTL FCStone

Quotes for feed grade SMP have also been improving over the same period (see graph below).  It is fair to assume that the sales out of intervention cater mostly to this market.  And the minimum price reached in the December sale was very much on par with the type of prices currently being paid for the fresh product.

Source: IEG Vu

5 – Demand somewhat flat currently but looking to improve in New Year

Demand growth had been assessed at around +1.5% earlier this year.  Lower oil prices, trade tariff disputes and weaker economic growth in many regions has flattened it a little in the last quarter of the year.

However, Chinese demand has increased in the earlier part of 2018, and is expected to increase in 2019 also.

Rabobank predict that, in 2019, Chinese demand will increase in double digits.  The cost of production is rising in China, with feed costs on the up partly as a result of the tariff/trade war with the US.  Chinese economic growth is however somewhat uncertain and this will impact demand for additional imports.  Even allowing for this, however, Rabobank predicts an increase in Chinese dairy consumption for 2019 of 1.5% year on year.

Source: Eucolait

In South East Asia, powder demand (including casein) has increased after a poor start to the year.  Butter and cheese imports have also increased, though from low levels.

Rabobank predict that the relative global production squeeze is set to continue into 2019, and bearing in mind relatively low levels of privately held stock – also fast shrinking SMP intervention inventories – and continued steady demand, they say there is a real risk that buyers may get caught out with the market “moving quickly upwards and catching them unawares” in the first half of the New Year.

 

6 – Not all rosy: Brexit, oil prices, international tariff wars

As 2018 comes to a close, there are some headwinds.

Brexit Day, 29th March 2019, is just over 100 days away, and the British, Irish Governments and the EU are now openly talking about preparing for the UK crashing out without a deal (a Hard Brexit).

It is worth reminding ourselves of a few dairy facts when it comes to our trade with the UK.

The UK imports 476,533 tonnes of all manners of dairy products from Ireland, but most of all cheese (138,000t) including a majority of Cheddar, and butter (49,000t).

They also export around 936,520 tonnes of dairy products to Ireland – this is mostly raw liquid milk from Northern Ireland which is being processed in the ROI.

So, firstly, the value of the UK imports from Ireland exceed its exports in value terms; and secondly, there may not be sufficient capacity within the UK to process the NI milk which is currently being processed in the ROI.

Hence, to quote the CLAL presentation from which the graph right and the information above is sourced, “Aside from political considerations, market equilibrium calls for the existence of a free trade agreement between the UK and the EU in order to limit the effect of Brexit on the constituents of the supply chain”.

Source: CLAL.it

The most immediately apparent negative impact from the political chaos and uncertainty surrounding Brexit development is the weakness of Sterling.  It makes our exports less competitive, and makes UK/NI milk cheaper to import, playing into the hands of retailers intent on unsustainable discounting, especially around Christmas as we have seen this week with fresh vegetables!

Source: Xe

Oil prices had risen very significantly during 2018, increasing export earnings for many emerging countries which rely on them to import their food necessities including dairy products.

In recent weeks, increased supply and the fear of economic headwinds potentially reducing demand has impacted crude oil prices, which have fallen dramatically to levels last experienced over 12 months ago.

Crude Brent oil went from US$87.54/barrel on 3rd October to around US$58-59/barrel in early December.

While Saudi Arabia is believed to be unlikely to risk upsetting the US by pushing too hard for OPEC output restraint (which would push up oil prices), Rabobank and other analysts nonetheless expect 2019 oil prices to average out in excess of 2018.

International tariff wars have also increased uncertainty on global markets.  Trade tariffs imposed by the US on China in particular have increased the cost of feed, and consequently the cost of milk production.  Paradoxically, this will, according to Rabobank, mean increased dairy imports in 2019.  Recent attempts at thawing out commercial relations between China and the US have resulted in some import concessions on US soya – but whether those suffice to improve Chinese production costs remains to be seen.

Source: InfoMine.com

7 – Where are the main price indicators?

The below sums up the main indicators, many explored in some detail above, to assess what they indicate by way of milk price equivalent levels.  It is clear that, despite the last two positive auctions, the GDT levels still reflect significantly lower returns than EU indicators, showing a continued differentiation between markets.

That said, it is noticeable that the various indicators, all of which are quoted below before 5.4% VAT is added, remain close to prices currently being paid by the main milk purchasers of around 30-31c/l.  This continues to prove our point that stability in farmgate milk prices, at worst, for the next few months at least, is a very sustainable and legitimate expectation from farmers!

Based on data from: EU MMO, INTL FCStone, CLAL.it, Ornua, GDT

CL/IFA/18th December 2018

Largescale SMP stock disposal may presage stronger powder markets in 2019

Just over 203,000t of SMP were sold out of intervention stock this year, with minimum sales prices edging up slightly from July.  Latest minimum sale price, at €1251/t, are €100/t or less below the quoted price for fresh feed grade SMP.

Source: IEG Vu based on EU MMO

Feed SMP spot quotes from France Agrimer for 24th October was €1248/t; PZ quotes for the Netherlands were €1390/t on 14th November, while Kempten (German) quotes for the same day were €1330/t.

We estimate that around 170,000t of SMP are left in intervention store, which is still a significant amount of stock.  Also, some analysts report that at least some of the tonnage sold out of intervention could still be in (private) stock as opposed to utilised in the market place.

Even allowing for this, there will be at least 2 more sales of SMP out of intervention by year-end, and real scope for further sales next year as demand from calf milk replacer manufacturers rises in spring.

Current fresh food-grade SMP prices, based on latest EU Milk Market Observatory reports dated 4th November, have edged slightly up at €1580/t.  Futures markets for the last few months have consistently suggested SMP prices into 2019 trending towards €1700-1800 in 12 months’ time.  Not a very exciting price, and in fact just over intervention buying-in prices, but well up on current levels.

While the price trend for butter and butterfat has been down, while remaining at historically strong levels, we would be hopeful of a rebalancing of the SMP/butter price relativity sustaining reasonable returns into next spring.  Of course, this depends strongly on global output trends (see below).

Milk supplies picking up in NZ, US but easier in EU

September production in the EU is estimated by USDEC (graph below) to have eased slightly.  There are no official figures available yet, but this is credible in the context of the impact of the summer drought on fodder and feed availability and costs.

Source: USDEC

German supplies for September are estimated by INTL FCStone to be 0.5% up, and French supplies 4.4% down on last year.  Dutch milk output for the Jan-Sept period was down by 1.9% according to ZuivelNL.

Global supply balance however is very modestly up, as can be seen in the USDEC graph, and this in conjunction with still high intervention stock is creating its own expectations.

Latest estimates of current demand growth are at 1%, due to a slowdown in the economy of China, and slower imports from SE Asia in general after a very strong 1st half, while output growth is outpacing demand slightly at 1.5%.

Returns easing at home, in the EU and internationally – though powder prices firming

The impact of the recovery in supplies coinciding with strong stocks and slightly easier demand is, predictably, that returns have been easing.

EU MMO figures (see below) suggest gross returns, before processing costs are deducted, of between 34.87c/l (allowing for Irish butter and SMP price) and 35.74c/l (allowing for EU average prices for all products) – so after a notional processing cost of 5c/l, a milk price equivalent of between 29.87 and 30.74c/l + VAT (31.5c/l – 32.4c/l incl VAT).

Based on EU MMO data

Closer to home still, the Ornua PPI for October has dropped a little further, from 110.4 points to 106.5 points – the latter equivalent, according to Ornua’s own calculations, to a milk price of 30.26c/l (31.9c/l incl VAT).

IFA’s recent research has shown, as per our November Dairy and Liquid Milk newsletter here that co-ops have undershot the PPI from May to September, costing a 350,000l milk producer up to €1900 over that period.

Source: Ornua

The future looks somewhat more encouraging for powder, however, with spot quotes rising for the last 3 weeks, and having again broken through the €1600/t mark in Germany, France and the Netherlands.

Interestingly, too, bearing in mind the importance of whey in most of our milk processors’ product mixes, average whey prices and spot quotes have also been rising over recent weeks.

Finally, European futures for SMP published today (15/11/18) suggest an expectation of SMP price recovery in 2019 to levels between €1700-1800/t.  Fast reducing SMP intervention stocks may influence this even more positively over the coming weeks and months, however.

On the same date, SMP trading on the NZX futures for the period January to April 2019 has sold for prices between US$2080-2175 (€1840 to €1924 at today’s exchange rates).

GDT – a bit of context

Much has been made of the fact that we’ve had 6 consecutive negative GDT auctions in the last 3 months.  However, since last August, the SMP prices has actually improved by US$50/t, to nearly US$2000 (€1770).

Also, the quantities on offer in any one auction tend to be a very small fraction of international trade.  The table below outlines the quantities which are expected to be made available for sale at the next auction on Tuesday 20th November.  While WMP is as usual the product of which the largest quantities are traded, most other products are traded in much smaller volumes.

For context, GDT traded 654,000t of all products combined in 2017.  For the same year, total dairy exports (all products) out of New Zealand amounted to 3.26m tonnes; exports of cheese, SMP, WMP and butter from the EU to 2.14m tonnes and 1.94m tonnes from the US.

Source: INTL FCStone based on Fonterra

 

CL/IFA/15th Nov 2018

Output growth expected to be relatively modest

The most recent EU short term outlook report published by the EU Commission shows EU milk supplies have grown more modestly, rather than fallen due to the drought.  However, it is expected that fodder supplies for the winter will be particularly affected in Germany, Northern France and the Benelux.  Ireland will most probably has similar problems, as will the UK.  Milk supplies for August were estimated at +0.5%.

Consequently, the EU Commission has revised its projected production increase for 2018 from 1.4% to almost half, at 0.8%.  For 2019, the continued impact of fodder shortages leads the Commission to estimate production growth at no more than 0.9%.  For both years, the EU Commission expects to a very small downward adjustment in cow numbers.

Source: EU MMO

Global supplies for the year to August were reported 1.5% up.  The graph right shows that somewhat slower EU growth for the month of August is being compensated for by rising US and NZ production.

Source: USDEC

Demand good in US, SE Asia and China, but growing less fast than output

Global dairy demand forged ahead in the first half of 2018, but is now reckoned to be rising by only 1% – with global output rising 1.5%.

Demand remains good in China, though import growth has slowed for the Jan-Jul 18 period compared to the same period in the previous year.

Source: CLAL

In the rest of SE Asia, demand for powders and casein has improved after a poor start to the year, while demand for cheese and butter is strong, albeit from low levels.

In the US demand is very strong for cheese and butter (after a poor 2nd quarter), while powder demand is slow.

Mexico, Algeria, Egypt and Singapore have seen strong increases in SMP imports, with strong increases in imports of butter in China, the US and Australia.  Cheese imports to Japan and Russia have also increased strongly – Russian imports came from outside of EU, which remains embargoed.

Source: EU MMO

Commodity prices easing, but September returns still stronger than current (Irish) milk prices

Commodity prices in September evolved positively generally in Europe – though butter did weaken – but significantly worse in Oceania.  Commodity prices between the two regions continued to diverge, with higher SMP prices in Oceania, and lower prices for most other commodities – especially significant difference on butter.

Source USDEC

Based on data from: EU MMO

More recent trends in Europe – late September/October – suggest continued easing.  However, returns from the main commodities for 30th September remained above 37c/l before processing costs – so a milk price equivalent of 32.21c/l + VAT (33.95c/l incl VAT) after a notional 5c/l processing cost has been deducted.

Based on data from: EU MMO

Outlook a mixed picture

Global output growth shows diverging trends in different regions: strong increases in NZ (and South America), relative stability in the US, and expectations of lower output at year end and new year from EU due to the impact of drought on fodders stocks.

While EU overall supplies have risen 1.7% for the January to July period, they have slowed in August, and statistics for the most recent period suggest that Germany, France and the Netherlands have seen negative growth.

While rising oil prices and a strong US$ are major positives, traders are concerned about what is going on in New Zealand: the NZ$ is very weak against the Euro, further lowering the price of NZ products on exports, volumes of milk are rising fast (+4.6% in August) and the GDT prices have been at odds with trends in Europe for some time, and are now dragging EU prices down.

Trade/tariff wars, the prospect of a potential hard Brexit and slowing global economic growth are also feeding into a somewhat less positive sentiment – all the more so when traded volumes were stronger in the first half of the year than they are now.

The normal bounce from the “holidays” demand (Thanksgiving, Christmas…) has been limited.  Stocks of butter have been rebuilt, and so prices have eased – though the expectation is that lower milk output over the winter and early part of 2019 will likely help prices recover.

Meanwhile, from an Irish milk price perspective, stability should be the worst case scenario between now and year-end.

 

CL/IFA/15th Oct 2018


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