The bearish tone of the current butter, SMP, WMP, and whey powders market is partially caused by lower demand, driven by reduced consumption. This does not mean that there is no consumption at all, it just means that sellers have to try a bit harder to find enough buyers for their products.
Quick FYI in between: Check out Vesper’s coverage of dairy products.
On a global level, it seems that competitive prices will likely bring sellers that bit of demand that is necessary to keep inventories from overflowing. We see that export demand flows to the cheapest source, which variates among products and regions. Without exports, all producing regions individually do not have enough demand to remain at the current price level.
The imbalance between lower demand and higher supply in especially the EU and US is not looking to change in the coming weeks, causing stock levels to rise and people to wonder what all the additional milk from the European milk flush will do to prices. The general feeling is that they will fall further, but nobody really knows where to. All we know is that if we keep up the current pace of price decreases, products will be incredibly cheap in just a couple of weeks.
Side note: Vesper launches new tools quite often on the website. Discover the free to use Dairy calculators!