High cream price does not last

The prices of raw milk (at spot level) are moving at a stable level this week (week 25), with a thin market. Many dairies do not need to either buy or sell. It means that there is a balance, with the milk supply decreasing somewhat. The DCA quotation yields a fraction (-€0,25) to €37 per 100 kilos (delivered at 4,4% fat). The market in Germany is also changing at an almost stable rate.

Room price down 
There is more movement on the cream market. Prices have fallen significantly this week, after the market trended downward last week. The purchasing parties are taking a wait-and-see attitude and there appear to be more butter stocks than initially thought. This is also reflected in the falling butter prices. Until recently, the cream market was supported by demand from the fresh segment.

Due to the more moderate temperatures, this support has disappeared somewhat, although the forecast for next week does indicate a nice summer lake. The waiting market can be read from the DCA cream price; this shows a decrease from €550 to €6.400 per ton (ex factory).

Intervention sales
The demand for skimmed milk concentrate is lively, resulting in rising prices. Many powder producers purchase concentrate to maintain capacity utilization levels, traders say. However, the rising concentrate price is not so much a result of good valorization. The DCA quotation for skimmed milk concentrate increases by €110 to €1400 per tonne (ex factory). This means that the listing has almost doubled in about 2 months.

The relationship with the price of skimmed milk powder is now starting to grow a bit crooked. This probably means the upward stretch is over. All the more so because the European Commission reportedly put 21 tons of intervention stock on the market on June 23.000 at prices starting at €1.200 per ton, sources say. This is likely to put some pressure on the market.