Inside Dairy
Dairy market deals lightly with lockdown fear
The good sentiment in the dairy market is holding up reasonably well, although the stretch upwards has ended in the meantime. Although a further tightening of the corona policy is in the air, the fixed dairy market is dealing with this fairly lightly. Liquid dairy prices are also holding up reasonably well.
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The dairy market is also experiencing a tight supply this week, as has been the case for months. In the trade of liquid products, the slowly increasing seasonal milk supply is hardly noticeable. The supply is limited and the trade is therefore thin. This is especially true for spot milk. In the Netherlands, the price remains at a historically high level of €50,50 per 100 kilos. In Germany, prices are taking a small step back, possibly due to a wider supply in France.
Cream and butter both down
After a significant price correction in the past week, the cream price is now falling less rapidly. The DCA quotation yields €55 to €6.810 per tonne. The price of butter drops in almost the same order of magnitude: -€45 to €5.200. This means that the large price gap in milk fat remains intact. That gap will become smaller at some point, but probably not in the short term, that is the expectation in the market.
Tender Onil
The skimmed milk powder market received support this week from the Algerian purchasing tender Onil, although the volumes to be filled were somewhat disappointing, market insiders indicate. Overall, demand for milk powder remains good and availability is low. This results in a narrow price increase from €10 to €3.195 per tonne. The expectation is that the market is almost at the top. This also applies to whole milk powder, which approaches €4.000 per tonne, but is unlikely to break through. Especially because the Chinese demand for milk powder has fallen somewhat, as the import figures for October show.
Cheese market slightly higher
The cheese market is probably the most sensitive to a further tightening of the corona policy, given that the majority of production is consumed within Europe. A hard lockdown will not do cheese consumption any good. At the same time, stocks are currently so low that the market could take a beating. Prices for Gouda and Edam are even higher this week and rise to €4.110 and €4.090 per tonne respectively. Cheddar and mozzarella are also noted in green.
Click here for an overview of the DCA dairy quotations.