Analysis Cheese
All brakes are loose on the cheese market
The DCA foil cheese quotations for Gouda and Edam took another step up this week and easily passed the psychological limit of €3 per kilo.
Cheese prices are clearly having the wind in their sails. That has been the case for a while, but this good flow is taking shape. The upward trend could also continue for a while. Many producers claim to be sold out. Edam in particular is almost not available.
In addition, a factory of the German cooperative DMK Group in Nordhackstedt (Schleswig-Holstein), which is operated jointly with Arla, recently switched production from Gouda to mozzarella. This factory produced approximately 600 tons per week and those volumes are no longer on the market.
Low milk supply
The cheese that is delivered is very young. This means that the build-up of stocks is not obvious. This is partly because the milk supply in northwestern Europe is currently in the seasonal trough, which means that relatively little cheese is produced. In addition, the combination of skimmed milk powder/butter also improves the valorisation of raw milk, although the tipping point is approaching again. This is because cheese prices are rising rapidly.
Many buyers have waited to hedge and speculated on a price decline in the fourth quarter. However, the opposite is true, which means that they are now entering the market as buyers. In particular, Eastern Europe and Mediterranean countries (such as Italy and Portugal) are currently consuming a lot of volumes.
Significant price increases
Prices are expected to improve further in the short term. However, for the longer term (December and Q1 2020), these buyers are cautious. The DCA foil cheese quotation for Gouda increases by €0,08 to €3,06 per kilo. The price of Edam plusts by €0,10 to €3,03 per kilo. Both quotations are therefore at the highest level since the beginning of May.
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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