When taking a look back at how much dairy prices decreased since their peak last year (e.g. EU Butter -40%, OCE SMP (Food) -40%, and US SWP (Food) -60%), some would say that a rebound in prices could be expected someday. However, the timing and strength of the rebound did surprise many, including us. Especially on the fats side of the dairy market, we saw a couple of fast price increases throughout the last two to three weeks.

Fundamentally however, there have not been that many changes at all. Production and stocks of almost all products are good and the demand for products still looks lower than it was last year. Most of the price movement we have seen, seems to be driven by sentiment and is due to traders mostly. Definitely not all products have felt support, as higher proteins are still under a lot of pressure for example.

Useful side note: Swiftly calculate the protein price differential with one of our dairy calculators.

The correct price for most products is quite hard to determine at this point, but it looks like the fair value for most dairy commodities is slightly lower than the prices we are seeing today. Maybe we will find the fair value somewhere in Dubai next week, where speculation will likely keep going.