Dairy market desperately looking for bright spots

The market is almost desperate for leads, but these are difficult to find. The Global Dairy Trade Tuesday's election was a windfall, but the result cannot change the negative sentiment in Europe. If there is a lack of sales, the milk supply will only increase. And it will remain that way until the seasonal peak in May is over. 

Under 'normal' circumstances, milk production would probably have been manageable this year, but due to the drop in demand (due to the lockdowns in many countries) there is now a surplus. Liquid dairy products are offered at dumping prices, especially in France and the United Kingdom.

Cream and skimmed milk concentrate prices have fallen even further after last week's deforestation, to €2.693 (-82) and €836 (-114) per tonne respectively. Liquid dairy prices are not supported by solid end products in the form of butter and skimmed milk powder.

Very weak butter price
The butter price is the negative outlier on the market this week and falls to €2.556 per tonne (-252). The butter market is extremely affected by the loss of sales in the food service. An impending lack of freezing capacity is increasingly a problem there. Eastern European producers in particular are putting pressure on the market.

The price of skimmed milk powder drops to €1.844(-46) per tonne. The distance to the intervention level is no longer that great. The world market seems to be slowly regaining some demand, but it is all still fragile and it is therefore not certain whether this can stop the price drop.

Cheese products have little confidence in the market and have to offer their products cheaper and cheaper to keep sales going. The price of Gouda drops to a measly €2.300(-140) per tonne. Of the basic dairy products, whole milk powder now provides the best valorisation of raw milk, but the price is also not keeping up and has fallen to €2.621(-66).

Click here to view this week's DCA quotes.