Inside Milk
Sunny weather gives dairy market energy
Although the seasonal milk supply increases, the availability of spot milk decreases. What is the reason for this, and how do the DCA dairy quotations react to this?
Read this article?
Become a subscriber and get instant access
Choose the subscription that suits you
Sentiment on the dairy market has improved considerably in a short time. In anticipation Easter Prices for raw milk and cream still showed a decline, but just before the festive weekend an upward trend has started. This is partly due to the good weather forecasts for the coming days, which means there is a lot of demand from the fresh segment.
Limited Availability
The stable butter prices, which move at levels of €4.000 per tonne, also free up room for higher cream prices. At the beginning of this week, cream was still trading at €4.350 per tonne, but prices have risen during the week. The DCA quotation is €4.450 per tonne. The supply of both milk fat and milk protein is tight, which also causes the DCA quotation for skimmed milk concentrate to increase.
These price developments are striking because a number of processing days are canceled around the Easter weekend. In addition, the seasonal milk supply is increasing, although milk production remains low The Netherlands, Germany and France behind previous years.
Global Dairy Trade
The higher prices achieved this week on the Global Dairy Trade (GDT) also free up space in Europe for an upward trend. For example, butter prices on the GDT rose 3,5% to $5,544 per tonne. European butter prices are at lower levels compared to New Zealand and the United States. This should benefit the export position of European exporters. At the same time, this price difference has been going on for some time, but there is little noticeable increase in demand.
Price of spot milk up
Cheese prices have found a bottom at a level around €2.750 per tonne (Gouda). Meanwhile, prices are cautiously pointing to higher levels. The improved sentiment on the dairy market means that spot milk is more sought after. The DCA quotation for raw milk (at 4,4% fat, delivered) will therefore increase by €0,50 to €31,50 per 100 kilos.
The improved conditions do not yet provide an immediate view of higher conditions payout prizes towards dairy farmers, because these are still on the high side.