The FAO Dairy Price Index averaged 146.4 points in July, down 3.8 points (2.5%) from June, but still 29.7 points (25.4%) above its value in July of last year.
International quotations for skim milk powder registered the steepest decline, followed by those of butter and whole milk powder, principally reflecting lacklustre market activities in Europe due to the summer holidays.
Furthermore, most buyers were well covered for their immediate needs, which, in tandem with weak demand from China and high dairy prices, led to declines in the demand for spot supplies, weighing on international quotations.
Meanwhile, world cheese prices remained stable, as high internal sales in European tourist destinations compensated for weaker global import demand. Despite an overall weak trading activity, tight global supplies sustained global dairy prices at elevated levels.
| Date | Butter 1/ | Skim Milk Powder 2/ | Whole Milk Powder 3/ | Cheddar Cheese 4/ |
| 2022-01 | 6326 | 3859 | 4243 | 3976 |
| 2022-02 | 6634 | 4097 | 4604 | 4246 |
| 2022-03 | 6923 | 4370 | 4869 | 4249 |
| 2022-04 | 7223 | 4482 | 4725 | 4251 |
| 2022-05 | 7008 | 4228 | 4388 | 4370 |
| 2022-06 | 7133 | 4261 | 4532 | 4659 |
| 2022-07 | 6819 | 4002 | 4351 | 4657 |
The Global Dairy Trade (GDT) auction concluded recently also displayed similar trend, with prices of all commodities decreasing by 3-6%.
While milk production costs have increased across the globe due to unprecedented inflation in food, fuel & fertilisers leading to higher payouts to milk farmers for milk produced by them and coupled with the fact that, milk production has dipped in major exporting regions like EU & Oceania while remaining stable (no increase) in Americas; it seems that higher inflation has taken the toll on demand leading to softening of prices.
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