Strong demand pushes dairy market up

Due to these circumstances, raw spot milk is fetching prices that have not been seen for a long time. The DCA quotation for the Netherlands went to €43,50 per 100 kilos delivered at 4,4% fat, an increase of €1,50 compared to last week. In Germany the situation (corrected for contents) seems similar, but high premiums are paid there, especially for meadow milk. Prices are quoted from €48 to €49 per 100 kilos. Fresh produce producers are even canceling promotions because the milk is becoming too expensive. The DCA quotations for raw spot milk are somewhat lower at €43,50 for North and €45,00 for South Germany, delivered at 4% fat. These odds are respectively €1 and €1,50 higher than last week.

Cream and skimmed milk also go along with the upward movement. The DCA quotation for concentrate rose to €2.580 per tonne (+€140), the DCA quotation for cream rose even faster to €5.375 per tonne (+€160). This further increased the distance between the cream and butter quotations, because DCA's butter quotation remained at €4.080 (+€35).

Many traders are wondering why the price increases are continuing so rapidly this week. There is a fairly limited supply, but this does not explain everything. There also seems to be a fear reaction involved, where buyers are confronted with a rising market after the holiday period and are afraid of not being able to stock up on enough product.

With regard to powders, it is striking that the quotation for skimmed milk powder (SMP) is gradually becoming more expensive again (DCA quotation €2.590 per tonne), but not nearly enough to explain the rapidly rising concentrate price. Concentrate is almost the same price. The fresh market is a bigger attraction.

Cheese market is more dynamic
The cheese market is now more dynamic. There is good demand, especially for Gouda foil cheese and cheddar. Prices are rising quickly. The DCA quotation for Gouda foil cheese became more than a penny more expensive this week and amounts to a quotation of €3.245 per tonne. Further price increases are in the pipeline. Demand is good, higher contract prices are already being mentioned for the near future and there are virtually no stocks. Cheddar also rose slightly in price, but was already in high demand and expensive. Red Cheddar from Ireland takes the top prize and reportedly fetches more than €4.000 per tonne.

The big question is how long this price boom will last. The higher quotations translate into higher milk prices and, expectedly, more production. 

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