Milk production decreases in EU; dairy product prices increases

Milk production decreases in EU; dairy product prices increases

Milk based products saw the second biggest price increase of the year, with Dairy product prices escalating to 11.4% at Global Dairy Trade auction on November 1st.  Whole milk powder (WMP) was the main driver of the price increase at the latest auction, with prices rising 19.8%. Skimmed milk powder (SMP) prices increased 6.5% and butter prices were up 4%. Not all dairy products saw price increases, with Lactose prices down 4% and butter milk powder (BMP) down 5.4%.

According to a spokesman for dairy industry association, the amount of milk production in Europe was on the lower side on a seasonal basis. In addition, the purchase of skimmed-milk powder by the EU had come. According to a market figures from EU Milk Market Observatory (MMO) the total milk production in the region decreased by 1.9% in August 2016 compared to August of last year. This happens to be the third sequential tumble in EU milk production in 2016.

The discounters Aldi Nord and Aldi Süd have raised the prices for fresh milk and H milk by more than 40 percent. The prices of milk in these supermarkets rose by 19 cents for fresh whole milk, which now costs 65 cents per liter – 41 percent more than before. Price for low-fat fresh milk was raised by 18 to 60 cents per liter, almost 43 percent more. Prices for low-fat H-milk increased from 42 to 60 cents.

Global dairy trade also affected badly after the decline in milk production in New Zealand following poor weather. The late October milk volumes in the key Waikato region have been down around 14% versus the same time last season.

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