Inside: Dairy Market
High cream price makes trader cautious
The milk market is in the twilight of the summer holidays. In the Central Netherlands, the school holidays are now history and the south and north will follow in the next 2 weeks. Due to the holiday period, there is a calm to quiet market.
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The raw milk trade is at a low level and is expected to pick up again after the summer holidays. With the end of the summer holidays in sight, the trade in fresh milk is picking up.
Fear of heights
These are exciting times for milk traders. The price of butter is now at such a price level that there is fear of heights. While last year a truckload of butter represented a value of approximately €52.000, this has now risen to approximately one and a half tons. This has consequences for the nature of trade.
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From 2011 up to and including week 34 in 2017 in euros per tonne
To attract
This mainly focuses on the short term, so to speak, the issues of the day. And this despite the expectation that the demand for butter will pick up towards the turn of the year. Due to the high prices, it puts butter users on the track of alternatives. An example of this is the use of vegetable oils, which means there is a risk of a drop in demand.
Unchanged
The supply of butter is limited and will not grow, given the high price level. Cream trading appeared to weaken at the start of the week, eventually recovering to last week's levels during the week. There is no shortage of cream available, but resistance is growing. The price level is unchanged at €7.900 per tonne compared to last week.
Weaker
The skimmed milk concentrate (MCC) market feels weaker compared to last week and has not been able to maintain last week's levels. The quotation fell by €34 in week 50 to €1.550 per tonne of dry matter. On the other hand, the cheese market is stabilizing, with the fourth quarter tending to a decline in cheese prices.
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Price in euros per 100 kilos of milk from 2016 up to and including week 34 in 2017.
Spot quotation
The spot price for raw unprocessed cow's milk increased by €1 to €44,50 per 100 kilos. This price is based on a fat percentage of 4,4% delivered free of charge to the factory. Under the same conditions, but with a fat percentage of 3,7%, the quotation of raw unprocessed milk in Germany increased by €0,50 per 100 kilos, to €42 for Northern Germany and €42,50 for Southern Germany.
The DCA spot price in Germany
Price in euros per 100 kilos of milk from 2016 up to and including week 34 in 2017.