Corona in Italy leads to lower spot milk prices

They expect lower sales to China. The limited availability of reefer containers means that sales are currently slow. How long this situation will continue is anyone's guess.

Spot milk prices down
Corona is also causing headwinds within Europe. Several northern Italian processors are reportedly taking things easier due to the accumulation of outbreaks in the country. They usually purchase relatively large volumes of (skimmed) spot milk from Germany, but sales have fallen. This is reflected in the DCA spot milk quotations for Northern and Southern Germany. These both decrease by €0,50 to €31 and €32,50 per 100 kilos respectively.

The quotation for the Netherlands also drops in the same order of magnitude to €33. Traders indicate that there is a 'thin trade' in our country. What is also exerting some pressure in the background is the growing seasonal milk supply. Historically, spot milk prices are under pressure at this time of year. 

German retail puts pressure on butter prices
The butter market has been further put under pressure this week by German retail (Aldi and Lidl). They reduced their purchasing price to €3.300 per tonne. This also puts pressure on the spot price of butter, the DCA quotation drops by €52 to €3.388 per tonne. The cream price, on the other hand, is picking up. A direct explanation is difficult to find, given that market sentiment is negative. Traders blame the increase on buyers who waited too long.

Milk powder further down
The milk powder market is still uncertain due to the sales uncertainty in China. In the short term, this could put further pressure on low-fat, whole and whey powder prices. The DCA quotation for whole milk powder will drop through the €3.000 per tonne mark this week. Rumor has it that the Chinese are currently tapping into existing reserves. This may eventually stimulate additional demand, so it cannot be ruled out that the powder market will show a strong recovery later this year. In line with the uncertain powder market, cheese prices are also under pressure.

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