The FAO Dairy Price Index averaged 119.2 points in August, up 2.7 points (2.3 percent) from July, marking its first increase in four months, while it remained 21.7 percent below its level a year earlier. The increase was driven by higher milk powder and cheese prices, while butter quotations were broadly stable. Skim milk powder (SMP) and whole milk powder (WMP) prices rose by 3.0 percent and 2.4 percent, respectively, as firmer quotations in the European Union more than offset seasonal declines in Oceania. In the European Union, tightening milk supplies, compounded by hot and dry weather in several major producing regions, supported prices, while sustained import demand added upward pressure, particularly for SMP. In Oceania, by contrast, increasing seasonal milk production weighed on milk powder markets. Cheese prices increased by 2.7 percent during the month, extending the recovery that began in July. Higher quotations in the European Union, underpinned by limited milk availability, more than offset further price declines in Oceania, where expanding export supplies and continued market competition from the United States of America weighed on prices. Butter prices remained broadly unchanged from July, as firmer European quotations, reflecting tighter milkfat availability, were offset by lower prices in Oceania amid increasing seasonal supplies.

 

 

Dairy price indices
(historical series in xls)