Inside: Dairy Market
Milk supply puts pressure on spot market
The milk price is increasingly supported by the rising butter and cream prices. The rising cheese price also provides perspective, but the price of raw milk on the spot market is still under pressure.
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The milk processors report that the milk supply is increasing rapidly; especially now that grazing is being used again. In Germany, milk supply is currently 1% to 2% above last year's level. On the spot market, the increasing milk supply is a reason to raise spirits. The cancellation of processing days (Friday, April 27: King's Day) and (Tuesday, May 1: Labor Day) also gives reasons to offer back raw milk.
However, the impact of the 'broken weeks' should not be taken too seriously. The market reports that many factories are continuing to operate. However, this does not prevent the price of raw milk from dropping. In the Netherlands, the DCA quotation (delivered at 4,4% fat) drops by €1,25 to €29,50 per 100 kilos. In Germany, prices (delivered at 3,7% fat) are a few euros lower. In France, a fraction more than €20 is paid for raw milk.
The price of skimmed milk is trading at low levels. In Northwestern Europe, prices are between €0,02 and €0,05 per kilo. The reason is the continued pressure on skimmed milk powder on the world market. The DCA quotation for skimmed milk concentrate drops by €20 to €630 per tonne.
Rising cheese and butter prices
Protein may be under permanent pressure, but this does not mean that there are no positive signals. For example, the price of butter has risen sharply in recent weeks, while the price of cheese has also risen based on good demand. Despite the fact that the German cheese price (Gouda 45) stabilized this week at €2.825 per tonne, there is confidence that the cheese price can rise further in the coming period.
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Historically, there is room for cheese prices to rise in the coming months.
Butter contracts have been concluded with German retail parties for the month of May for €5,76 to €5,80 per kilo. These prices provide room for rising cream prices. Cream prices were in flux this week; at the start of the week, volumes were trading at €6.200 per tonne. Later in the week, prices rose towards €6.500 per tonne. After that, prices fell again.
The DCA cream price increases by €200 to €6.350 per tonne, which means there is a searching market. Both the buying and selling parties vote.
| DCA spot price milk | Price range (wk 17) | Number of problems | Average |
| €29,50 per 100 kilos (-€1,25) | € 28,00 - € 31,00 | 6 | €29,50 |
| Explanation DCA Markets: Prices were under some pressure this week, due to the increasing milk supply. There is a mood in the market about this. Reference is also made to the lower prices in Germany. On balance there is a negative trend. | |||
| DCA Room | Price range (wk 17) | Number of problems | Average |
| €6,35 per kilo (+€0,20) | € 6,20 - € 6,40 | 6 | €6,35 |
| Explanation DCA Markets: Prices fluctuated quite a bit this week. At the beginning of the week there were rapidly rising prices; later sentiment changed somewhat. Based on the butter price, rising prices are possible. However, it remains to be seen whether that potential will actually come true. | |||
| DCA skimmed milk concentrate | Price range (wk 17) | Number of problems | Average |
| €630,00 per tonne (-€20,00) | € 600,00 - € 700,00 | 6 | €630,00 |
| Explanation DCA Markets: For skimmed milk concentrate, lack of processing resulted in a lower price. This was also the case last week. As long as the price of skimmed milk powder does not pick up seriously, the price of concentrate will probably remain in a downward spiral. |
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