Inside Milk
Second wave keeps a grip on butter and cheese
The prices for cheese and butter are also affected by the second corona wave in the world this week. Meanwhile, liquid dairy is back on the road after a few lesser weeks.
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In recent weeks, the dairy market has felt weak across the board, although the 'liquids' appear to have already recovered from the corona scare. Demand has recovered and prices are rising. After a dip, cream prices have been above €4.000 per ton again since the middle of this week, while the price of skimmed milk concentrate is increasingly moving away from the €2.000 limit. The spot milk quotations in the Netherlands and Germany increased by €0,50 to €37 and €36 per 100 kilos respectively. UHT milk in particular is in demand.
The turnaround on the market is also due to the fact that liquid dairy is still limited in availability due to the trough in milk supplies. It is said that the fear caused by the second corona wave is slowly disappearing into the background.
Cheese remains weak
We have not yet seen this change in permanent manufacturers. Butter and cheese in particular feel persistently weak. Customers limit themselves to small volumes and almost only do business 'close to home'. For example, relatively few volumes are still recorded for the second quarter of 2021, something that worries dairy producers.
DCA quotation for Gouda and Edam drops for the fourth week in a row, to approximately €2.800 per tonne. Because cheese still provides the best value for milk, a relatively large amount of milk disappears into the cheese bin. On the other hand, inventories are reportedly not very large, partly because retail requires large volumes. However, the coming weeks also seem to be weak, or demand will unexpectedly increase significantly towards December. Unexpected mainly relates to the loss of food service demand, which costs large volumes.
Butter and milk powder stable
Butter is also failing. Although the DCA quotation is not dropping and is trading at €3.310 per tonne this week, there are concerns about the large frozen stocks (partly in private storage). The demand for fresh butter is not bad, but the price cannot make a difference due to these frozen stocks. The milk powders are moving fairly steadily, prompted by tight supplies. There is no demand for exports, because the United States is filling the world market with cheaper products. This is partly due to the weak dollar.
Click here for explanation of the DCA quotations (liquid)
Click here for explanation of the DCA quotations (cheese)