Prices for several major dairy commodities are continuing to rise in the European Union, with milk powder and butter recording further gains over the past four weeks. The increase comes alongside higher feed and energy costs, adding pressure on dairy producers across the region.
Skimmed milk powder recorded one of the notable increases, rising 2.3% over the four-week period to €309 per 100 kilograms. Whole milk powder also moved higher, increasing 2% to €377 per 100 kilograms.
Butter prices followed the upward trend, gaining 1.1% during the same period to reach €416 per 100 kilograms. In contrast, cheddar prices moved in the opposite direction, declining 1.1% to €322 per 100 kilograms.
EU Dairy Commodity Prices
The latest movements show mixed price trends across key dairy commodities.
| Dairy Commodity | Four-Week Change | Current Price |
|---|---|---|
| Skimmed milk powder | +2.3% | €309/100 kg |
| Whole milk powder | +2.0% | €377/100 kg |
| Butter | +1.1% | €416/100 kg |
| Cheddar | -1.1% | €322/100 kg |
The increase in milk powder prices indicates continued strength in the European market for processed dairy products. Milk powder is widely traded internationally and is an important product for dairy processors and exporters.
Italian Spot Milk Prices Continue to Increase
The upward movement is also being reflected in spot milk prices in Italy. Spot milk prices have continued to rise and currently stand at €0.45 per kilogram.
Higher raw milk prices can increase the cost base for processors, particularly when combined with rising costs for feed, energy and other farm inputs. Changes in raw milk prices can subsequently influence the economics of producing dairy commodities such as milk powder and butter.
Feed and Energy Costs Add Pressure
While dairy commodity prices have increased, producers are also facing higher operating costs. During week 38, feed costs were reported to be 4.6% higher than during the previous four-week period.
Energy costs recorded an even stronger increase, rising 14.1% compared with the previous four weeks. Energy represents an important expense across the dairy value chain, including farm operations, milk cooling, processing, refrigeration and transportation.
The simultaneous increase in feed and energy costs means that higher dairy product prices do not necessarily translate directly into improved producer margins.
Mixed Market Movement
The price performance of different dairy commodities remains uneven. Milk powders and butter have moved higher, while cheddar has declined.
Such differences can reflect changes in demand, inventories, production conditions and market requirements for individual dairy products. Milk powder prices can also be influenced by international trade and demand from food manufacturers, while butter markets are affected by demand for milk fat and processing decisions.
For European dairy producers, the current market presents a combination of higher product prices and rising input costs. The increase in feed and energy expenses could influence production decisions and the profitability of dairy farms and processors.
Outlook for EU Dairy Producers
The latest price movements underline the importance of monitoring both dairy commodity prices and production costs. Higher prices for milk powder and butter may provide support to the dairy market, but rising input expenses remain a significant consideration for producers.
With feed costs up 4.6% and energy costs up 14.1% over the stated comparison period, European dairy producers are operating in an environment where input costs are increasing alongside raw milk and selected dairy product prices.
The continued movement of milk powder, butter, cheddar and raw milk prices will remain important indicators for dairy farmers, processors, traders and other participants in the European dairy market.