News Milk
Butter market explodes and closes gap with cream
For once, the big surprise in terms of price formation in the dairy market does not come from the liquid segment. The butter price has exploded and has skyrocketed by more than 10% to the price that perhaps should have been paid for the product long ago.
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According to DCA's listing, €565 has been added to the price this week, which equates to a price increase of 10,73%. The price of cream also rose this week. DCA's quotation increased by 2,24% to €7060 per tonne. But the gap between the cream and butter quotations has almost closed with this week's move. The price of butter has increased towards the cream equivalent.
According to traders, this is partly because the end of the year is approaching. The broom has been swept through the warehouse and the old stocks of butter have now really disappeared. Anyone who still wants spot butter must bid along with the buyers of fresh cream.
Whether the current price level will last for a long time is still an exciting question. High prices are still achieved for small volumes of traded product.
The high butter price also pushes up the price of whole milk powder, to a level of €4150 per tonne. In the meantime, not much trading takes place at these prices. But skimmed milk powder is not cheap, with a price of around €3300 per tonne.
It is possible that powder and butter are the most profitable combination in the commodities in terms of valorization, but the cheese quotation has also reached a high level. Foil cheese in particular is being pulled hard, at the expense of natural cheeses. It is a phenomenon that occurs more often around this time of year, but it feels extra exciting in the current market. Cheddar rose in price even more than Gouda cheese or mozzarella. That is also easily explained. The Irish supply is currently quite low, because the Irish dairy farming industry is increasingly optimizing, but still produces highly seasonally, and the supply is now low.
In relative terms, the spot market for raw milk is almost the calming point in the market. Anyone looking for raw milk still has to dig deep into their pockets, because there is hardly any product available and in small volumes. Yet prices have virtually stopped rising.
Skimmed milk concentrate did increase slightly in price, but relatively limited. This product is now no longer more expensive than skimmed milk powder, as was the case for some time.