Analysis Cheese
Less milk drives up cheese prices
There is a revival going on in the cheese market. The DCA listing for both Gouda and Edam is thus taking a serious step up. The tight stocks and low milk production are the driving force behind this.
After the dip in August, cheese prices have already recovered somewhat in recent weeks, but this week has clearly started to move upwards. This is due to the classic imbalance between supply and demand. There is a lot of demand, especially in the short term (prompt), while third countries are also on the market. Due to tight stocks, it is challenging for traders to get trading volume.
The scarcity is due to a shift in what the best valorization of raw milk. Until recently, that was cheese, but due to the rising prices for skimmed milk powder and butter, that is no longer the case. In theory, this means less cheese on the shelf. This is reinforced as milk production moves towards the seasonal trough.
Less German milk
In addition, the milk supply in Germany has been below last year's level for 4 months. In August, the German processors collected 2,78 million tons. That is a decrease of 1,2% compared to the record year 2018. This means that there is still a lot of German milk in circulation, but less than last year. And that creates mood.
It is remarkable that all German federal states are less involved with milk, except for North Rhine-Westphalia. The production is still considerably ahead of last year. In addition to Germany, the Dutch supply has also been lower for some time. Many cheese factories are located in this part of Europe. is Europe-wide the milk collection quite in line with last year.
Quotes up
A large cooperative milk processor is told that it has already (almost) arranged cheese sales for 2019. Cheese producers are therefore betting on higher prices. The bottom in the market therefore seems stable, although at the same time one must guard against euphoria. The Gouda DCA quotation rose this week by €0,05 to €2,85 per kilo. The quotation for Edam also increases by €0,05 to €2,79 per kilo.
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
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