Whey Finance

Dairy analysis: whey records a 13th consecutive price drop

This is another poor overall performance for European dairy quotes last week, according to multinational financial services firm StoneX.

Peter Meehan, senior dairy analyst for EU at the company, explained that the average price of butter, skimmed milk powder (SMP), whey and whole milk powder (WMP) have all fallen , despite slightly mixed price movements within individual products.

The EU butter index posted five declines on the rebound, falling €95 (-1.3%) to €7,250, driven by German and French quotations.

The SMP saw its fourth consecutive decline, falling €70 (-1.7%) to €3,937, its lowest level since early March.

Meehan said whey saw its 13th consecutive decline last week, falling €47 (-4.6%) to €985, its lowest level since last October.

The WMP index recorded its third consecutive decline, falling €57 (-1.1%) to €5,013.

Meanwhile, the total volume traded on the European Energy Exchange (EEX) last week stood at 4,910t, spread across 982 lots. Friday was the busiest day for commercial activity, with 1,505 t sold.

1,810 t of butter were marketed, 2,775 t of SMP and 325 t of whey.

“EEX butter futures fell further last week, down 1.1% on average over the July 2022-February 2023 band, with an average price of €6,836. EEX SMP is also down, with its average price standing at €3,699, down 1.3% over the week.

“EEX whey, meanwhile, was also down again, falling 1.1% on average across its band from July 2022 to February 2023, with an average price of €996,” Meehan said.

It was also another negative week for cheese with all weekly EEX indices falling.

Milk production

StoneX dairy analysis shows French milk production for the month of May was nearly 2.2 million tonnes, down nearly 2% year-on-year.

10.51 million tonnes have been collected so far this year, down 1.4% from the same period in 2021. Fat content was 3.93% in May, while that the protein content was 3.21%.

In Spain, milk production in May was 654 kiltons (kt), down 1.3% year-on-year. Fat content was reported at 3.71%, while protein content slipped to 3.27%

Milk production in May in Denmark was reported at 492 kt, which is slightly down from 2021.

Collection since the beginning of the year now stands at 2.36 million tonnes, an increase of 0.4% compared to the same period last year.

Danish milkfat is reported at 4.26%, while protein content is reported at 3.56%.

Meehan noted that milk collections for June in the Netherlands stood at 1.15 million tonnes, up 1.5% year on year.

First-half collections now amount to 6.91 million tonnes, down 1.5% year-on-year. Fat content for June was 4.25%.

Meanwhile, the United States Department of Agriculture (USDA) slightly lowered its 2022 forecast for domestic milk production in the latest World Agricultural Demand and Supply Estimates (WASDE) report.

“The 2022 forecast has been lowered to 102.5 million tonnes, which would see production fall by 0.1% compared to the volume collected in 2021.

“A reduction in expected milk per cow for 2022 is cited as the reason for the adjustment,” Meehan explained.

The USDA’s forecast for 2023 was also lowered slightly, to 103.6 million tonnes, which would equate to a 1.0% increase from the forecast for 2022.