In July 2022, the European Dairy Mintec Category Index (MCI) continued on an upward trend, reaching an average price of EUR 4,882/MT, rising steadily for twelve consecutive months and lifting the index by over 1,635 points year-on-year. This is an increase of 50% versus the average value of July 2021.
Each of the commodities that consist of the EU MCI (butter, skimmed milk powder, cheddar and whole milk powder) have experienced a significant jump in price. However, the butter price has steadily corrected down from its peak in the first week of May 2022. Consumers have already reacted to rising inflation in the food and beverage sector, including dairy, resulting in reduced butter consumption. With elevated butter prices, domestic demand has started to subside.
Similarly, both skimmed milk and whole powder European prices have declined from their peaks. Lower buying interest from foreign markets has driven the decline particularly demand for whole milk powder from China and demand for skimmed milk powder from North African countries, the main export markets for the EU manufacturers.
By contrast, cheese prices, the largest component of the EU MCI, have steadily risen over the twelve months. The cheddar index was up 3.2% month-on-month in the three weeks of July 2022. Buyers have increased purchases ahead of the summer, and an uptick in demand is not expected until the end of the summer.