Inside Milk
Spot price of milk drops by 35 euros
The spot prices of raw milk are losing again. It is noticeable on the market that the holiday season is approaching.
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Dutch dairy processors speak of declining volumes and contents. This does not immediately lead to higher prices, because trading is in a weak mood. In addition, factory maintenance is currently being carried out in some places, which is slowing down demand. In Germany and France, milk supplies last week were approximately 2% ahead of 2017.
The DCA quotation yields €1 to €34,50 per 100 kilos (delivered at 4,4% fat), which represents a wide bandwidth. The market in Germany is also trending downwards, with a price of €32,50 in Northern Germany and €33,50 per 100 kilos in Southern Germany (delivered at 3,7% fat). The price of skimmed milk concentrate is also under pressure and has fallen by €60 to €1.140 per tonne.
Room price will not decrease further
The downward trend in the price of cream has currently been broken. Cream suppliers focused on higher prices at the beginning of the week; This means that the DCA quotation stabilizes at €6.200 per tonne, with trading both above and below.
The pressure on the butter price continues, due to inventories that are higher than estimated. In recent months, many dairy processors have focused on butter production in combination with skimmed milk powder. The demand for butter is declining due to the holiday period. They are now selling the stock that processors have in storage to avoid price drops. This reinforces the negative sentiment.
Cheese prices are leveling off
Cheese production has been lower in recent months, partly because stocks are described as tight. This has freed up room for higher prices (almost continuously) since February. Until last week there was an increasing trend, with the German cheese price (Gouda 45) recording an average of €3.025 per tonne. This week the price stabilized; However, at spot level, cheese is already offered for lower prices. The price is expected to enter a stable period.
On the Global Dairy Trade (GDT), the price of Cheddar fell sharply this week. If that is a harbinger for cheese prices elsewhere in the world, it does not bode well in the longer term. However, that is not the case yet.
| DCA spot price milk | Price range (week 27) | Number of problems | Average |
| €34,50 (-€1,00) | € 32,50 - € 37,00 | 6 | €34,50 |
| Explanation DCA Markets: Just like last week, the spot price for raw milk is falling. The market is weak, despite there not being much supply. There is a wide bandwidth. |
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| DCA Room | Price range (week 27) | Number of problems | Average |
| €6.200 per tonne (-€200) | € 6.150 - € 6.300 | 5 | €6.200 |
| Explanation DCA Markets: The cream price has stabilized this week, while the butter price is still falling. The summer temperatures give the cream price some support. |
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| DCA skimmed milk concentrate | Price range (week 27) | Number of problems | Average |
| €1.140 per tonne (-€60) | € 1.000 - € 1.200 | 6 | €1.140 |
| Explanation DCA Markets: The price of skimmed milk concentrate is again under pressure this week. Just like last week, this is the result of the falling price of skimmed milk powder. |
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