Uncertainty abounds in the Dutch dairy market as a result of the second corona wave, which some have already called corona tsunami, in our country. This has maneuvered trade into a kind of intelligent lockdown this period. Buyers only place orders that are absolutely necessary and sellers do not insist. What do the DCA dairy quotations do?
Just like last week, there is no panic in the dairy market, but there is nervousness underneath. This has everything to do with the further development of the coronavirus in the Netherlands and the European Union. What measures and restrictions are still coming? Are the Netherlands and other member states still heading towards a lockdown? What does this mean for the sales opportunities? These are all uncertain factors that make the dairy market less than sparkling this week.
Buyers wait and work with as little stock as possible. In this way they protect themselves against possible future drops in demand. The price also plays a role. What you buy at a relatively high price now can suddenly be much cheaper during a lockdown. Buyers therefore postpone their purchases as long as possible and only work in the short term.
However, purchasing behavior does not yet lead to great stress among sellers, such as dairy producers. The milk supply is still in a trough, which prevents production from overflowing. In addition, the traditional autumn purchases, which are also pre-sorted for Christmas, are coming. As a result, sellers have the feeling that many large orders still have to be placed in the coming weeks and are waiting. This has created a market with little supply and demand.
In this atmosphere, the DCA dairy quotes do not make any erratic movements. For example, the DCA spot quotation for raw milk remains at €36,00 per 100 kilos delivered, with hardly any supply. In southern Germany in particular, raw milk is in slightly higher demand, causing the DCA quotation there to increase by €2 to €38 per 100 kg of milk delivered at 3,7% fat.
After a sharp decline last week, the cream market feels slightly weaker again, partly due to the loss of food service sales. Room surrenders €50 to achieve a DCA quotation of €4.230 per tonne of finished work. Butter follows in line with cream, with an exactly equal price reduction to a DCA quotation of €3.365 per tonne finished. Compared to the first wave this spring, these declines are not too bad. This is partly due to the fact that sales in retail are going well.
For example, products such as butter, long-life milk, cheese and desserts (custard) are sold well in the supermarket. In addition, restaurants and caterers are switching much more quickly to making takeaway meals or home delivery, which helps to offset part of the loss of turnover. Factors such as a possible total lockdown on the demand side and the expected seasonal increase in milk production could have a major impact on the dairy market in the coming weeks.
However, things are still a long way off at the cheese and powder market this week. There is little to do in both segments. The DCA quotations for skimmed milk powder and whole milk powder are slightly higher at €2.205 per tonne and €2.730 per tonne ex works respectively. However, there are relatively few transactions below these quotations. The DCA quotation for whey powder remains completely the same at €755 per tonne finished work.
The DCA quotations for Gouda and Edam cheese also hardly move and this week both coincidentally amount to the same amount of €2.920 per tonne finished work. Mozzarella production is being tempered to meet lower demand, but the DCA quotation is down €40 this week to €2.625 per tonne of finished work. Cheddar Curd is less available, causing Cheddar prices to rise slightly
Click here for explanation of the DCA quotations (liquid)
Click here for explanation of the DCA quotations (cheese)