Inside Milk
Raw milk prices are rising rapidly in southern Germany
Although the milk supply is slowly declining and the European heat wave is also making its contribution, this is not leading to a price rally on the European spot market. The DCA quotations are moving, but 1 quotation is getting a big push: that of raw milk in southern Germany.
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Milk supply in the Netherlands and other European countries (including Germany and France) will gradually decrease towards the summer. This is seasonal, but the heat wave that has ravaged the European Union over the past week does give it a boost. In Germany and France in particular, this has led to buyers entering the market to stock up on extra raw milk.
In southern Germany in particular, this is prompted by strong demand from Italy. In the thin market for spot milk, this has resulted in the (scarce) available lots being sold for relatively high prices. The DCA spot quotation of raw milk for southern Germany has therefore shot up 27 this week: by €4 to €39,50 per 100 kilos of milk (at 3,7% fat).
Dairy products are in line
The Netherlands and Northern Germany are beyond the appeal of the Italian market. The DCA spot prices for these regions are rising slightly in the wafer-thin market (+€1 to €34,50 per 100 kilos). For the Netherlands this is milk with 4,4% fat and for Northern Germany it is milk with 3,7% fat. The parties in the market are counting on the revival in the spot market for raw milk to be temporary, due to the upcoming summer holidays.
Cream and skimmed milk concentrate remain stable. This is partly due to the holiday period, but also to the products to which they are related: butter and skimmed milk powder. Since the demand for butter from the fresh segment is too low, the DCA quotation for cream is also being tempered. Although the price has varied from day to day in the past week, the DCA quotation for cream remains stable at € 4,20 per kilo ex works.
Way up hard to find
Skimmed milk concentrate is in step with the skimmed milk powder market, which (despite a positive outlook) failed to find its way up this week. Skimmed milk concentrate suffers from this, because the DCA quotation increased by €50 to €1.850 per tonne of dry matter.
On the whole, the spot market (also looking at the quotation of foil cheese) is looking up this week. However, this movement will be tested for strength in the coming weeks due to the European holiday period and the summer weather with more common temperatures.