Dairy markets cooled a bit this week on the European spot market, with butter falling from the highs of recent weeks by €300/t.

Correspondingly, skim milk powder (SMP) also fell, dropping in price by €40/t to hit €2,410/t.

There was better news for cheddar cheese and whole milk powder (WMP), with cheese going up €20/t and WMP going up €15/t.

Over at the Global Dairy Trade (GDT) auction, the results from this week’s sale were more or less flat, with the index recording a 0.5% decline.

Interestingly, butter prices continued to rise at the GDT, recording a 6.2% increase on the last auction. At €6,861/t, it puts the GDT butter ahead of the current European price which has fallen to €6,385/t.

However, the WMP price fell at the GDT, recording a 2.5% fall compared with the last auction and because WMP makes up over half of the total amount of product traded, it has a disproportionate impact on what direction the index goes in.

Cheddar prices dropped by 1% also, which put the European cheddar at a significant premium to the GDT price. With the Euros in Germany and an increase demand for fast food, that may be helping European cheese prices.

At 16,787t of product traded, the auction was relatively small and these smaller than normal auctions have been a feature for the last six months or so.

Some of the larger co-ops have announced milk price increases for May milk and in doing so have warned that high dairy prices, such as current butter prices, could switch off demand.