Milk scarce available, dairy quotations are rising

The price on the dairy market actually continues the trend of the past week. Now that the summer holidays are coming to an end, the dairy trade is slowly starting to get back to full speed and the focus is, among other things, on covering for the fourth quarter. Some buyers may be acting more aggressively than usual, looking at the development of dairy quotations. Because the increase in DCA quotations continues across the board this week.

Fear of raw material shortage
The lack of the raw material milk is one of the main reasons for this. There is some hesitation from the trade to speak of a real raw material shortage. But the fact is that the dairy producer could use an extra batch of milk in recent days. The fact that the dairy industry in the Netherlands has invested heavily in expanding processing capacity in recent years also plays an important role. In addition to the kilos, as described last week, the fat and protein levels in the milk are also not always that bad. This is because dairy farmers use less expensive concentrates, but also provide fresh grass. As a result, more milk must regularly be used for the production of, for example, cream, cheese or milk powder than normal.

The spot market for milk in both the Netherlands and Germany is therefore very thin, with a limited volume of milk traded. The spread was large, so that the DCA quotation for Dutch spot milk remarkably amounted to €0,50 at €42,00 per 100 kilos at 4,4% fat delivered than last week. In Germany, the spread of prices in transactions was good. The DCA quotation for raw milk in Northern Germany increased by €1,50 to €41,50 per 100 kilos delivered at 4% fat, while spot milk from Southern Germany increased in price by €1 to reach €43,50 per 100 kilos.
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Cream the hit of the week
The cheese bin is a popular destination for milk these days, because cheese sales continue smoothly. Both the quotation of DCA foil cheese from Edam (+€60 to €3.155 per tonne finished work) and Gouda (+€65 to €3.185 per tonne finished work) increased in price. However, the most surprising price movement was seen in cream. The DCA quotation of cream had been on a strong rise for several weeks and the trade thought at the end of last week that the momentum had gone a bit. Nothing turned out to be further from the truth. The DCA cream quotation for this week increases by €195 to reach a quotation of €5.215 per tonne finished work. This is the highest rating since the autumn of 2018.  
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Sales of cream continue to flow smoothly, especially to Eastern Europe (Poland, Croatia) and Southern Europe (Greece). Sales to the fresh segment for ice cream and whipped cream, for example, are also going well. It is striking that the quotation of cream is now starting to get a little out of step with the valuation of butter. The DCA quotation for butter also increased by €50 to €4.045 per tonne finished work, but less strongly than that of cream.

Milk powders and concentrates stable
Finally, milk powders and skimmed milk concentrate still show a very stable market picture. The DCA quotation for whole milk powder is rising again, with €35 to €3.155 per tonne finished work, while skimmed milk powder will increase to €2.545 per tonne. Finally, the DCA quotation for concentrate remains completely the same: €2.440 per tonne of dry matter ex factory.

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