US dairy prices may affect EU rates
But quotations came under new pressure more recently, as fears took hold that seasonal expansion of milk supplies and lack of export demand could easily push the market out of balance.
It looks like EU prices, especially for butter, have to come down further in order to compete on the world market, according to the Board.
However, the fundamentals that drove prices in 2007 remain in place — a shortfall in supply of dairy products on the world market relative to potential demand, and it is thought unlikely prices can fall significantly while this situation prevails.
It was noted the trend in US prices could influence world and EU prices in 2008, because the declining dollar exchange rate was leading to increased US presence on dairy markets. US cheese and butter prices are already below world levels.
Most of the 17 co-ops and dairies across the EU in the Dutch Dairy Board’s monthly rankings lowered their January milk prices.
Glanbia continued to top the price rankings for January, paying about 4c per litre more than the next highest milk buyer, Danone of France.
