Strongest increase in the price of free milk in the Netherlands

The dairy market is relatively quiet at the beginning of January. For example, there are still parties on holiday, but there is also little supply from the cheese makers. It has had an impact on the mood, which has improved slightly. Thanks to these developments, prices also have the opportunity to recover more quickly from the traditional Christmas dip.

Recover faster than expected
In week 1, the DCA spot price for raw milk rises to €24,50 per 100 kilos (delivered at 4,4% fat), an increase of €5 compared to last week. It is an increase that not everyone in the market had anticipated. Under pressure from concerns about the possible increase in milk supply, a slower recovery was expected. 

In the Netherlands the market appears relatively calm; supply and demand are in balance. This does not apply to Germany. More milk is offered there. That it is a puzzle is evident from reports stating that German milk is offered in the Netherlands. For example, North German milk costs €23 per 100 kilos (delivered at 3,7% fat). In the south of Germany the price is €24 per 100 kilos delivered.     

Butter has the most potential
Once again it is butter and cream that perform well. For example, ZuivelNL quoted €410 per 100 kilos for butter, but day trading also appears to create room for slightly higher prices. Butter receives support from the Global Dairy Trade (GDT), which recorded higher prices again. It produces prices on the world market that are well aligned and creates opportunities for the European product.

The cream price increases in week 1 from €4,10 per kilo to €4,40 per kilo, an increase of 7,3% and there is room for more. At the end of January, the German Aldi announced a new price.

The problem with butter is its counterpart: egg whites. Skimmed milk powder is affected by the intervention stock. Another 16 tons will be offered on January 100.000. After the latest disappointing sales, the question remains what will be sold. At the same time, the shelf life of the product starts to play a role. On the daily market, skimmed milk concentrate is rising again to €900 per tonne of dry matter ex-factory. Skimmed milk moves around €0,05.  

Does cheese perform better? A-ware's relatively good milk price in particular attracts attention. It appears that branded cheeses and products for B2B are still performing well. The problems are greater in foil, but the market has also managed to find a balance there. On the German stock exchange the price is €2,70 to €2,95, on the day market buyers still try to get around €2, but sellers no longer sell product. 

Found bottom?
For now, the dairy market has found a bottom. The disadvantage is that a period of lower demand is coming, where milk production usually increases. If the increase in supply lags behind expectations, the market could still take a positive turn.

However, if there is more milk, it will be a different story. The processing does not immediately seem to be the problem, but the question is the third point on the balance beam. Production, processing and demand must be in perfect harmony to keep the white engine running at full speed. Feed is not a problem in Germany, France, most of Belgium and the Netherlands. A lot has been invested in processing, but now the question remains.