What gives the best valorisation: butter/powder or cheese?

Cheese prices fell somewhat in the past week, but a cautious recovery is on the way. The question that currently concerns processors is what gives the best valorization of raw milk: cheese or butter/skimmed milk powder?

After the quiet summer period, activity on the cheese market increases somewhat. The better mood has been created by Arla's biweekly tender which closed higher early this week. That was a signal that the prices for Gouda and Edam had bottomed out, after which the demand for cheese increased again. In addition, the prices of milk fat (especially cream) are increasing, while milk protein is also looking upwards with a slanted eye.

Despite these improved signals, a rebound in cheese prices seems out of the question. After all, the milk supply within Europe is generally stable. In addition, a hard Brexit hangs over the market, which creates uncertainty. This threatens the European sales of cheese and mozzarella to the United Kingdom.

Valorization of raw milk
Until recently, cheese gave the best and most stable valorization of raw milk. This is changing now that the value of milk fat is more profitable and the price of skimmed milk powder attracts something. That is why various dairy manufacturers are reconsidering to shift the focus in the processing process from cheese to butter/skimmed milk powder. This also brings uncertainty.

In short: activity on the cheese market is back, although major price movements are not to be expected. The Gouda DCA quotation rose this week by €0,03 to €2,80 per kilo. The quotation for Edam increases by €0,04 to €2,74 per kilo. Edam benefits from improved demand from the smelting industry (pizzas and the like)

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. 

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Wouter Job

Wouter Baan is editor-in-chief of Boerenbusiness. He also focuses on dairy, pig and meat markets. He also follows (business) developments within agribusiness and interviews CEOs and policymakers.

w.baan@boerenbusiness. Nl

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