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Falling Global NDM/SMP Prices Prompt Request

27 April 2012

US - The strain of falling global milk prices and bulging worldwide milk production prompted the Polish delegation to request that the European Union’s (EU) Agriculture and Fisheries Council consider reintroducing exports refunds at their monthly committee meeting held today and tomorrow, according to Thursday's Daily Dairy Report.

In January 2009, the EU reintroduced export refunds of 200 Euros/ MT, or 12¢ per pound, on SMP which were discontinued in November 2009 in response to the strong global dairy product prices.

Similar to the U.S. dairy product support prices, the EU has intervention prices. The EU intervention price for SMP is about $1.02/lb. Intervention is open from Mar. 1 to Aug. 31. The EU can suspend intervention if quantities offered exceed109,000 MT, or 240 million lbs.

The chart (please see full report) illustrates current low side NDM/SMP prices reported in key export countries/regions. Unless NDM/SMP prices stabilize soon, it appears that SMP will enter EU intervention.

Dry product prices as reported by Dairy Market News were mostly lower for the week ending Apr. 27.

The Central dry whey mostly range is 48.25¢ to 56.5¢, down 0.25¢ on the low end and 1.5¢ lower on the high end. The West dry whey mostly range is 46.0¢ to 53.25¢, unchanged on the low side but down 1.25¢ on the high side. The Central and West regions are reporting NDM price lows of $1.10/lb. and $1.05/lb., respectively. The Central/East NDM mostly range is $1.12/lb. to $1.30/lb., down 3.0¢ on the low end and a penny lower on the high end. The West NDM mostly range is $1.12/ lb. to $1.24/lb., down 3.0¢ on the low end and 2.0¢ lower on the high end.

The spread between CME spot Cheddar block and barrel cheese prices expanded today. Five loads of blocks traded at $1.5275/lb. up 0.25¢. The barrel market traded seven times before closing 2.75¢ lower at $1.4200/lb. The CME spot butter market closed 3.0¢ lower at $1.36/lb. on an offer.

CME spot Grade A and Extra Grade NDM markets also settled lower, each down a penny, at $1.1575/lb. and $1.1175/lb. on two offers. Dry whey futures were the sole dairy commodity to settle higher on the day after NDPSR reported a higher than expected dry whey price yesterday.

Further Reading

- You can view the full report by clicking here.

TheCattleSite News Desk



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