EU production of Skim Milk Powder reached its highest level since 1991 in Q1 of 2014 according to DairyCo.

It says production reached 309,499 tonnes, an increase of 22% compared to the Q1 10 year average, largely due to strong increases in Belgium and Poland, while Germany and France maintained high levels of production.

DairyCo also note that cheese production also increased compared to the average, up 6%, while WMP production decreased 6%. Butter production in Q1 was in line with the average level of production over the last 10 years, down 1%.

In terms of prices it says EU wholesale prices have continued to trend downwards in May as milk production reached peak while continuing to maintain high levels.

This, combined with limited trading, has allowed for stocks to be built putting pressure on prices. The Euro weakened against the USD in the second half of May, which may have provided some opportunity for exports which were limited by the strong Euro in April.

DairyCo’s latest market update says that butter prices fell between April and May, down 1.9% on average. Trade continued to be limited over the month although there was some price support with various Spring holidays, as buyers entered the market largely for packet butter.

Prices for food quality SMP saw a large reduction in May to €2,911/tonne, down 7.1%, as robust supply and the lack of committed buyers placed downward pressure on the market. Feed quality SMP prices fell marginally, down €25/tonne (1.0%) over the month.

Whey powder was the only commodity to see prices increase, up 2.0% to €905/tonne, which could be a slight market re-balance after a couple of months of heavy declines.

Cheese prices (German Emmental) remained stable over the month at €4,480/tonne.