Global wholesale dairy markets remained strong in August, with average prices increasing for most products as demand outweighed supply.

Whole milk powder values rose by 3.5%, to US$4,751/t (£2,988/t), with skimmed powder rising by 3.4%, to $4,301/t (£2,705/t), said a report by DairyCo. “EU markets showed the largest increases in prices despite limited export activity, suggesting that domestic demand remains strong in relation to available stocks.”

EU butter values increased by 2% to $5,531/t (£3,478/t) – their highest level since October 2011, as supplies remained tight. But larger stocks in the USA and Oceania meant their markets dropped by 3.3% and 3.7% respectively, to $3,128/t (£1,967/t) and $3,975/t (£2,500/t). Global cheddar prices fell an average of 2.7% to $4,167/t (£2,621/t).

A strong start to the New Zealand milk year had led Fonterra to raise its production forecast for the 2013-14 season to 1.54bn kg of milk solids – a 5% increase on last year and up on its previous forecast of 2% growth. In the first three months of the milk year, from June to August, milk production was 3.4% up on last year, with August intakes up by 8%.

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