World Wholesale Report

Published 6 February 18

Price movements were mixed across markets and products in January. Prices generally declined in both the EU and the US, with Oceania seeing some positive price developments. Differences in milk production trends may well be the reason for the disparity, as weather issues continuing to plague New Zealand (NZ).

EU prices fell for both butter and SMP, but saw a small increase for WMP. The weaker US$ has dampened some of the downward movement in product pricing, so Euro-denominated prices saw bigger drops. Demand for WMP was reported to have strengthened in January, perhaps as a result of the announcement of a weaker than expected milk season in NZ, where WMP is the main product produced. While Oceania WMP prices remain lower than those of the EU (see below), the gap has reduced markedly over the last month.

In the US, stocks continued to build, keeping downward pressure on commodity pricing as they seek to export surpluses. Cheese saw the largest drop in the month, moving below Oceania average prices, while WMP prices rose marginally.

Prices for Oceania butter remained relatively stable in the month, while milk powders saw strong upward movements. The reduced forecast for milk production for the 2017/18 season appears to have added some urgency to the buying side of the market, pulling up prices for both SMP and WMP in January. WMP prices remained low, however, in relation to other key exporting countries. Cheese prices also declined, attributed to a pause in buying rather than any resistance to price levels, as stocks are reported to be relatively well balanced.

World Wholesale Table