The FAO Dairy Price Index averaged 140.1 points in October, down 2.5 points (1.7%) from September, marking the fourth consecutive monthly decline, nevertheless, it remained 18.7 points (15.4%) above its value a year ago. In October, international prices of all dairy products covered by the index fell.
Lower-than-anticipated purchases by China and lacklustre demand for spot supplies as most importing countries were well covered for their immediate needs, together with the impact of the weaker Euro against the United States dollar, underpinned the drop in world dairy prices.
Market uncertainty about the direction of demand for dairy products, due to soaring inflation and economic downturns, also pressured international dairy prices down. Nonetheless, demand for some dairy products in other countries in Asia increased, containing potential larger declines in dairy prices.
| Date | Butter | Skim Milk Powder | Whole Milk Powder | Cheddar Cheese |
| 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 | 6793 | 3974 | 4326 | 4687 |
| 2022-08 | 6610 | 3702 | 4011 | 4756 |
| 2022-09 | 6530 | 3661 | 3982 | 4753 |
| 2022-10 | 6320 | 3515 | 3908 | 4726 |
Meanwhile, we have also seen sharp reduction in GDT Auctions over last few months, which has continued over this week as well.
Europe has got good availability of milk (reversed from negative growth over last year to positive growth now) aided by warm weather. Oceania has also seen good weather and healthy growth in milk production. This would lead to normalisation of production and prices over next few months. However, how demand shapes up, is still not clear because of the economic shocks, inflation, Russia-Ukraine conflict, fuel price rise, rate tightening, strengthening USD and other factors. Lets see, how this takes form in winter.
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