Dairy futures markets point to rising milk value

Published 8 June 18

The future value of milk (FMPE) was lifted by 10% in May as futures contracts continued to settle at higher prices.

The bullish price trends on the future markets, as evidenced by forward curves for both butter and SMP, suggests a willingness by traders to pay more now to secure product in future months. This may be in response to the impact on milk deliveries from the colder than average spring and the expectation that product availability could be limited.

Forward Curves Butter Smp

The European physical markets showed similar movements, with dairy product prices up across the board. Demand by traders to secure stocks for later in the year continues to drive up prices, with butter up by 9.4%, and SMP up by 6.8% on the previous month. This translates to a 10% increase in the value of milk on an equivalence basis.