Cheese market continues to send strong signals

Cheese prices are expected to remain fixed until the new year. The uncertainty for 2020 is still great, although the first signs are positive.

The cheese market is in the grip of a tight supply. Buyers are eager, producers are exploiting this situation and traders are navigating in between. There is a lot of demand especially for nearby (delivery in quarter 4). It is therefore expected that cheese prices will remain fixed at least until the turn of the year.

The extreme price increase of recent weeks is now leveling off somewhat. The DCA quotation for Gouda and Edam rose by €0,02 to €3,14 and €3,12 per kilo respectively.

Meanwhile, the trade is increasingly looking ahead to the new year. Many customers are hesitant. At the same time, there is a realization that the cheese supply will probably remain scarce for the time being. This is because we are in the trough of seasonal milk production and skimmed milk powder/butter still provides a better valorisation of raw milk than cheese.

Transactions on DAO.EU
Whether the higher cheese prices will continue in 2020 remains to be seen. However, the first signs are positive. On the internet trading platform 'DAO.EU' the first contracts for the new year have now been concluded. 

Last week, for example, 132 tons of Gouda cheese was traded for €3,035 per kilo for delivery in the second quarter, when the seasonal milk production will peak. For delivery in the first quarter, 132 tons were also traded for €3,04 per kilo. These transactions, well above €3 per kilo, can be seen as a strong signal.

(This article is part of the subscription Boerenbusiness Milk & Feed Pro† In the coming period you can check the weekly cheese analysis of Boerenbusiness temporarily free to read.)

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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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