Analysis Milk
Concentrate contrarian in lower 'liquids' market
Skimmed milk concentrate shows a contrarian move in a further declining market for liquid dairy. Skimmed milk concentrate is in high demand and is therefore rising sharply in price. Raw milk, on the other hand, goes down almost as hard.
Read this article?
Become a subscriber and get instant access
Choose the subscription that suits you
This is evident from the latest quotations from DCA Markets. Concentrate is a bit too expensive for the production of milk powder, because with a price of almost €3.200 per tonne, there is little left to earn money after powdering. Especially with the current high energy prices and expensive transport. Skimmed milk powder yields more than €3.400 per tonne. However, from countries such as Greece there is still a need for raw materials for fresh dairy production, among other things.
Raw milk did fall slightly in price again this week, after the slight recovery the week before. Dutch product also remains very scarce. In Germany the offer seems slightly better. This situation can be seen from the price development.
Cream down slightly
The room quotation only drops slightly this week. It seems that buyers are hesitating for a moment: wait for the price to drop further due to an increasing milk supply, or buy anyway because supply remains tight? The butter quotation reflects this feeling, but only a minimal price drop can be observed there.
Prices for cheese and milk powder continue to rise slowly. Producers appear to be preparing for a further price increase. Maybe that space is there too. After all, the combination of milk powder and butter is more profitable than cheese and whey.
The latter product is, by the way, remarkably expensive. Whey concentrate currently yields around €1.000 per tonne. Whey powder for food is priced close to €1300 per tonne. This is dramatically expensive for veal calf farming, although it is not yet an all-time high price. You will need to add a few hundred euros for that.