World Wholesale Report

Published 11 July 19

Movements on wholesale markets varied across regions during June. Oceania prices fell across the board, with significant declines in butter and cheese markets. These large declines will have led to the 12% month-on-month decline in the FAO’s dairy price index. Conversely, US markets moved up while EU prices varied by product.

EU butter prices eased in June, driven by falling demand, particularly for packaged butter, and full cold stores. Buyers are reportedly well stocked in the short term, and so are not pressured to nail down future contracts. Meanwhile, tightness in SMP markets supported prices. Demand, both internally and internationally, remained strong and steady. WMP markets remained stable, with production reportedly ahead of demand, and adequate stocks.

In Oceania, Cheddar prices have been extremely volatile in recent weeks. Prices in June dropped back by over $800/tonne from the previous month. Part of this drop is likely a re-balancing from the steep increases at the end of May. The recent volatility has put buyers off making immediate purchases, weakening prices. Butter prices also weakened considerably in June, reducing the gap with EU prices from $950 to $225 per tonne. Good availability of product in store has contributed to the price decline.

The sharp decline in butter and Cheddar prices were mirrored at recent Global Dairy Trade auctions. The average price index in June for butter and Cheddar fell by 13% and 15% respectively, compared to the previous month

Meanwhile, powder markets were considerably calmer, with buyers reportedly well covered in the short term.

US cream inventories were reportedly tight, due to strong demand from ice cream makers. Some butter producers opted to sell their cream to capitalise on the strong prices. The resulting drop in production, along with some seasonal closures, has limited availability. With elevated demand from the holiday period, prices have moved up. Cheddar prices remained relatively flat on the month, with good supplies and stable demand steadying the market. Meanwhile, powder markets remained firm in June. WMP markets are described as steady, with supply meeting demand. However, higher prices than EU and Oceania have resulted in a lack of export interest.


World Wholesale Table