DCA Benchmarks: Powder market commentary week 40

Skimmed milk powder is the stellar performer in this week's EU dairy market. In less than a week the price jumped by between €150 and €175 to almost €3,400 a tonne. This is not the highest price seen in recent years, but it is coming close to that.On a global level, the current DCA benchmark for SMP is not the highest price. In the US, prices are over €4,000 a tonne, while in New Zealand they are lower, but there is something brewing, as they say.Indications are that we haven't seen the top of the current wave yet. The price rise has its origins in the still increasing popularity of high-protein dairy products. In the US high-protein drinks are tapping the milk flow, together with the cheese and WPC producers. Together, they reduce the volume of milk available for drying, and SMP itself also finds new uses, with high prices as a result. In Europe, we don't see the same thing yet, but as dairy markets are always interconnected, SMP prices elsewhere in the world also go up.The benchmark prices for FCMP (WMP) and FFMP are moving the same ways as SMP, but not in the same pace. The whey powder market is much more balanced, with stable to slightly higher benchmark prices. Product is still in short supply, demand is firm and the strong demand for protein is also being felt in this segment, but in this market segment there is no sudden price surge as with SMP.