Christmas break comes at the wrong time

In the run-up to the Christmas holidays, the milk supply is increasing again. Not every processor collects extra liters, but locally 8% to 9% is a fact. It is not clear what the supply is like to the large group that supplies FrieslandCampina. This is important because of a possible standstill. On the other hand, the market does not believe that the drug will actually be used.

More milk?
It does not look like there will be less milk in the coming weeks. This is because of the less positive stories about the milk price, which may have to take a step back. Meanwhile, more cows are being slaughtered in the Netherlands, while the size of the livestock herd is increasing less rapidly in Germany.

All these developments have an impact on the market, because there is more. There is a lot of talk in the corridors about Phil Hogan and what Brussels is going to do with the intervention measure. It is quite certain that the fixed price purchases will be replaced by a tender. However, no final decision will be made in the short term. This is because of Christmas. Only then will the European Parliament vote on possible decisions.

As mentioned, Christmas is also approaching and that puts an end to Christmas purchases. It results in significantly lower prices. For example, cream drops to €4,10 per kilo of finished work and skimmed milk concentrate comes to €700 per tonne of dry matter finished of work.  

Price for raw milk plummets
The price that is slipping rapidly is that of raw milk. For example, Dutch spot milk drops to €18 per 100 kilos, a minus of €8,25 per 100 kilos (delivered at 4,4% fat). In the north of Germany the milk amounts to €17 per 100 kilos (delivered at 3,7% fat) and in the south it costs €19 per 100 kilos (delivered at 3,7% fat).  

Although the prices of raw milk are taking a heavy hit, this does not apply to cheese. The good news is that the price there is not falling further and the stocks are described as normal. On average, Gouda foil costs €2,10 to €2,50 per kilo of work. Those who really need to buy pay the higher price. In Germany prices seem to be slightly higher. This is in line with the German stock exchange, which records a lower end of €2,80 per kilo. However, the stock market has often proven to be too positive in the past. 

Prognosis
There are concerns about the first quarter of 2018. Buyers and sellers of cheese do not yet know where to find each other. Everyone seems pretty sure there will be more milk, but there are still a few chance cards. Mention the reaction of dairy farmers to phosphate rights, drought in New Zealand and a standstill. It's going to be very exciting. However, it is a fact that the milk price is going down. However, it will probably be a few euros rather than €10.