Prices have been easing across all sectors since the summer and this has reduced pressure on buyers in the run up to the critical festive season. Butter has dropped significantly and is now around the €4250/ton mark.

While this is still a high price considering historical levels, the relief is still palpable for buyers as the outlook was looking extremely grim earlier in the year. There is talk of a significant amount of butter stocks across the EU which is gradually forcing the price down. However we won’t talk too soon on the butter price as nobody in the industry would be surprised to see this change in the New Year considering what has happened since Q1 2017.

Cheese prices have, like butter, also eased back following the trend of butter. Cheese had been relatively stable over the summer but there has been significant downwards pressure since then. Mozzarella is now trading around the €3300/ton mark and Mild Cheddar is around a similar level.

Again there are signs that significant stock levels are at play here which has worked to the advantage of buyers. Many long term contracts were also higher priced than the level we’re at today which has further strengthened buyers’ hands. There are expectations of more reductions in 2019 but again we have to be cautious as we were making the exact same predictions this time last year! If common logic is applied prices should ease but nothing is predictable anymore as we are all too aware of.

While the dairy market has experienced its fair share of volatility over the last few years there is also the ongoing Brexit negotiations to deal with! Politicians in both UK and Europe still seem to be in great uncertainty about what the eventual outcome will be.

The drama surrounding Theresa May’s decision to delay the parliament vote hasn’t helped the currency this week and the euro went immediately back to around the same level against the pound from early 2017. The impasse is of particular importance to the European dairy industry as the UK is a huge importer of cheese and butter especially. Hopefully sense will prevail eventually and we will have a sensible deal that will suit all parties and common logic suggests this will be the case despite the current hysteria. However, the way negotiations have gone so far are not doing anybody any favours so we’ll hold the page for now.