Inside Milk
Spot milk prices simply hold up
Historically, the prices of spot milk fall in the last quarter, but that is not the case this year. The cream price does get a little bit, but this is offset by a higher price of skimmed milk concentrate.
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The month of November is about to begin. This means that the trough in seasonal milk supplies will not be long in coming. In Germany, production is slightly above last year's level, and in the Netherlands, collections were also above the 2 level in the past 2018 months. Dairies are reportedly doing well with the volumes of raw milk. There are neither shortages nor surpluses.
Stable spot milk prices
Spot prices usually reach their peak in early October, only to slowly lose ground in the fourth quarter and fall sharply around Christmas. However, a downward trend is not an issue for the time being. The DCA quotation for the Netherlands has been stable for a few weeks in a row at €36 per 100 kilos. In Northern and Southern Germany the price is €35,50 and €37,50 per 100 kilos respectively. This means that 'free milk' is traded at levels above payout prizes for dairy farmers.
Room price further reduced
The price of (spot) milk is supported by the higher cheeseand milk powder prices. As a result, the quotation of skimmed milk concentrate will benefit from an increase of €20 this week to €2.200 per tonne. There is some pressure on the milk fat side. The price of cream drops again, now with €100 to €4.250 per tonne. This means that cream is more in line with a butter price (ZuivelNl) of €3.520 per tonne. It is expected that butter producers will become interested in purchasing again, which will probably mean that the cream price will find a floor.