Analysis Cheese
Slight correction for cheese prices
The cheese market is still characterized as quiet. In the short term, prices will tend to decline slightly. In the longer term, there is a lot of uncertainty. Demand must remain good to be able to absorb production.
The cheese trade has been relatively stable for some time, which makes it difficult for the trading houses to manoeuvre. Although there lots of milk to cheese is processed, production decreases. This is due to the declining seasonal milk supply.
The demand for cheese is quite tame in mid-August, partly due to the holiday season. Compared to last week, cheese prices are slightly down. The DCA foil cheese quotation for Gouda falls by €0,01 to €2,82 per kilo. The price of Edam also decreases by €0,01 to 2,75 per kilo.
Uncertain outlook
However, it is not yet a race in terms of medium-term cheese prices. The tight stocks and fairly constant export demand make a large price drop unlikely. At the same time, on balance (slightly) more milk is being produced in Europe than last year. The average milk price in Europe in July was €33,70 per 100 kilos, which is a fraction higher than the same month in 2018.
Since the milk price in many European countries is well above €30 per 100 kilos, this probably encourages dairy farmers to maintain production levels. In addition, the drought causes local problems. This makes a decrease in European milk production unlikely.
With a depreciated butter price it is likely that large volumes of milk flow into the cheese vat in many countries. Despite the fact that the stocks are not large, demand must therefore be maintained in order to keep cheese prices afloat.
This article is part of the subscription Boerenbusiness Milk & Feed Pro† In the coming period you can check the weekly cheese analysis of Boerenbusiness read for free for a limited time.
Wouter Job
© DCA Market Intelligence. This market information is subject to copyright. It is not permitted to reproduce, distribute, disseminate or make the content available to third parties for compensation, in any form, without the express written permission of DCA Market Intelligence.