Settled values on futures contracts provide a good indicator of how market participants expect prices to move, based on current conditions. The latest drops will reflect the concerns over the impacts of lower demand and rising product availability on dairy product prices.
The forward milk price equivalent (FMPE) value combines settled prices for butter and SMP futures contracts on the EEX exchange. Between Oct 2019 and Feb 2020, the FMPE remained in the region of €35-€39 cents/100kg for contracts expiring April through August.
As coronavirus spread across Europe however, market sentiment shifted, and settled prices fell. In early March, before governments starting restricting social mobility, FMPE fell about 11% to around €34c/100kg. More recently, we have seen a further drop, with FMPE falling to around €30c/100kg for contracts with April through June expiry dates.