Inside Milk
Cream price takes off, fixed dairy market remains tame
The summer heat is still making itself felt on the dairy market, after this was initially not the case. This is mainly reflected in the price development of liquid dairy. Solid dairy products such as cheese and milk powder are not experiencing a revival.
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Let us first say that it is a thin dairy market, with relatively little volume traded. This is characteristic of the holiday period, which is now coming to an end. In West Germany, for example, schools have started again, leading to increased demand for cream. In addition, the supply of liquid dairy is under pressure now that the seasonal decline in milk production is exacerbated by the extreme heat of recent days.
Cream benefits from heat
In recent weeks, cream prices have fluctuated between €4.000 and €4.100 per tonne. This week there has been a revival, with the DCA quotation rising by €280 to €4.370 per tonne, the highest level since the end of 2019. The revival is due to good demand from the fresh segment.
The rapidly rising cream price means that the butter price does not fall further, but rises by €70 to €3.335 per tonne. However, cream is far too expensive to produce butter from. However, the market expects that the overvalued cream price will hold for a while, as availability will be under further pressure in the coming weeks.
Concentrate almost as expensive as powder
Skimmed milk concentrate is also on the rise, rising by €170 to €1.985 per tonne. Skimmed milk concentrate is almost as expensive as skimmed milk powder, which briefly rises above €2.000 per tonne. Powder prices feel weak, partly due to the strengthening of the euro, which hinders export opportunities on the world market. In addition, American dairy is popular on the world market, as the good export figures show.
The higher cream and concentrate prices also push up the spot milk price. The DCA quotation for the Netherlands and Northern Germany increases by €1 to €33 per 100 kilos. The quotation for the southern German market increases by €1,50 to €35, thanks to improving Italian demand. It should be noted that the spot milk trade in Northwestern Europe is very thin.
Little activity in cheese
There is also little activity on the cheese market. However, the downward trend of recent weeks appears to have stopped, as the quotation for Gouda and Edam rose slightly to €2.795 and €2.780 per tonne respectively. Sales to retail are excellent, sales to food service are disappointing. Mozzarella mainly relies on the latter, causing this quotation to drop to €2.650 per tonne.
Click here for explanation of the DCA quotations (liquid)
Click here for explanation of the DCA quotations (cheese)