Shortage in liquid dairy drives prices up

This is evident from DCA's weekly quotes. In the wake of liquid dairy, prices for cheese and powders are also rising, but at a much slower pace.

The price increases for raw milk, calculated in percentages, just exceeded the price increases for skimmed milk concentrate. The pace of price increases appears to be increasing rapidly, especially in Germany.

However, raw milk also recorded a record price in the Netherlands this week of an average of €52,50 per 100 kilos, higher than during the peak at the end of last year.

Due to the strong demand for protein-rich products, the tables currently seem to be turned when it comes to cream and skimmed milk concentrate. Manufacturers usually saw concentrate as a by-product of cream extraction, but now concentrate is more in demand and scarcer than cream. As a result, the quotation for skimmed milk concentrate shot up this week to €3600 per tonne of dry matter, a all time high.

Cheese prices, for example, seemed stable according to the German official quotations, but based on trading this week, the DCA quotation shows that there is still an upward trend in prices.

Dairy producers can fetch good prices for various commodities on the open market. However, not all companies benefit from this, because they are bound by longer-term contracts or a still tight milk supply. The latter will gradually decrease. The levels in the milk are also increasing. However, even the companies that can benefit from the high 'free' prices appear to be reasonably cautious. They want to avoid selling too much product now that they may still need at a later time. Then having to buy more would be financially very unprofitable.