World: What are the market signals for dairy commodity prices now?

Fats prices, in particular, were sitting at record-breaking levels in September with only a marginal decline in butter and cream in October in response to signs that milk flows were back in growth in the UK. As we reported in October, butter prices fell to £6,500/t (-3%) whilst cream fell to £3,096/t or -2%. Milk supplies for GB so far in October have been running at year-on-year growth throughout the month and including data up until 26th October are now at 2.6% ahead of October last year. Increased milk production should start to feed through to declining commodity prices further but there are some signs that may muddy the picture. Production in the rest of Europe is facing some challenges, despite growth in milk prices. Irish milk production has been back all year (-4.9% from January to August) which has significantly curtailed the availability of Irish butter and cheese to the UK market. Elsewhere in Western Europe, bluetongue virus has had an impact on yields in markets ...