Low milk supply is reflected in high cream price

The dairy market in Northwest Europe is certainly feeling what can be seen as positive in these times. However, the revival of the Global Dairy Trade earlier this week failed to excite, as has often been the case this year. If we look at the DCA quotations for liquid dairy, we see higher prices. The cream price for this week will increase by €165 to €4.565 per tonne. It should be noted that the revival already took place last Thursday and Friday in particular.

The fact that prices will not rise further halfway through this week is because processors are increasingly marketing cream instead of producing butter themselves. Butter prices have risen in recent days and are again above € 3.400 per tonne. This is mainly a result of the high cream prices. If we look closely at butter, cream is about €300 per ton too expensive. The premium that is paid is mainly due to customers in the fresh segment. Incidentally, there has been a gap between cream and butter almost all year round.

Cheese and milk powder aside
The weeks-long rise in cheese prices has come to an end. This is partly due to the stricter corona measures, which can further weaken demand from the food service. The milk supply will soon increase again and it is expected that a lot of milk will go into the cheese box. This is because cheese feels fairly firm (unlike butter) and demand from retail absorbs a lot of volume.

We see stable price quotations on the market for milk powder. A further increase is unlikely due to cheaper American product on the world market. In the long run, traders are more committed to powdered milk and cheese than butter. This is due to the large volumes of butter in intervention that will enter the market later this year.

Click here for explanation of the DCA quotations (liquid) 
Click here for explanation of the DCA quotations (cheese)