Inside Milk
Spot milk prices continue to rise, but for how long?
The DCA quotations for raw milk continue to increase. The question is whether this trend is sustainable, given that the raw material value of milk is under pressure.
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Liquid dairy prices are on the rise. It is warm in parts of Europe and will also be warm in the Netherlands next week extremes predicted. This creates a mood, because milk production then takes a hit. Moreover, demand from the fresh segment will then increase.
South Germany
The German spot market is additionally driven by buyers from Italy. The DCA quotation for spot milk for southern Germany therefore increases by €1 to €35 per 100 kilos. The ranking has thus risen to payout prizes towards the (German) dairy farmers. The availability of milk is limited, making the spot market thin.
The above will change if prices continue to rise, because it will then become more interesting for dairy processors to sell collected milk on spot. In the Netherlands, the spot price is also increasing further (+€1,50 to €33,50 per 100 kilos). Just like in Germany, the Dutch milk supply shows a decreasing seasonal trend, which limits the availability of liquid dairy.
Weak cheese and powder market
The declining milk supply and weather forecasts also mean that cream prices are increasing. The DCA room quotation increases by €200 to €4.250 per tonne. This means that prices are correcting towards butter prices, which (after a few weak weeks) have found a bottom at approximately €360 per 100 kilos.
Sales of whole and skimmed milk powder feel weak. This also applies to the cheese market. The spot prices are now overpriced in relation to the raw material value of the milk. As a result, there are doubts in the market as to whether the rising trend of spot milk is sustainable.