Inside Milk
Another large volume of intervention powder sold
The European Commission again sold a large volume of intervention skimmed milk powder. As a result, something startling happened this week on a flat dairy market in terms of price movements.
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The intervention stocks of skimmed milk powder have been practicing a pressing effect out on the price. At the beginning of this year, 370.000 tons were still stored in intervention. At the end of September this volume had shrunk to 280.000 tons. The stock reduction did not go smoothly in the third quarter of 2018, but that changed in the fourth quarter.
Less stock is less disruptive
During the penultimate tender (mid-October), the European Commission sold 29.778 tons of skimmed milk powder, with an underprice of €1.230 per ton. This week (week 45) another tender took place, in which 30.000 tons were sold at an underprice of €1.250 per tonne. This causes prices to rise slightly, which is in line with the European quotations of skimmed milk powder.
Various market parties are responding positively to the news: the faster the stock shrinks, the less the intervention scheme will disrupt the milk powder market. There are now about 220.000 tons of milk powder stored in intervention.
Vote remains fixed
The mood in the market does not show much color difference with last week. The undertones in the cream market have become firmer, but at the same time there is probably not much room for higher prices. The butter stocks in Europe seem to be able to meet the demand for Christmas, partly because a relatively large volume is shipped from Ireland and Great Britain to mainland Europe.
5.400
euro
Spot milk trade is thin, although there is more demand this week. Dairies are not prepared to sell below the payout prices (to dairy farmers). The DCA spot milk quotation remains at €35,50 per 100 kilos (delivered at 4,4% fat). Prices in Germany also show no movement. Because the supply of skimmed milk concentrate (MMC) is limited, prices are showing a slightly increasing trend. However, the DCA quotation remains at €1.450 per tonne.
Few cheese stocks
Although the prices for Cheddar on the world market are clearly trending downwards, cheese prices in Europe are simply holding up. Historically, the fourth quarter often brings price declines, but that has not happened yet this year. Inventories are described as tight and the relative weak euro ensures that the volumes are easily sold on the world market.