Analysis Milk
Heated price rallies make solid dairy more expensive again
Prices for solid dairy products, especially those for butter and powders, have risen sharply again. Butter stole the show and for a change dragged the cream price up, instead of the other way around. Milk powder prices reached or broke new psychological barriers and mozzarella came next to Gouda in terms of price.
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In terms of value, butter and skimmed milk powder now yield generously more than €60,00 per 100 kilos of milk. Actually, that was already the case at the beginning of this week, even more so now. This means that the current spot milk prices, as recorded by DCA, are well justified from the market.
It is unclear exactly what caused the sudden and sharp increase in the price of butter. It may be a pent-up demand, reinforced by the insight that there are hardly any stocks. Others cite a Valio tender as the reason. Approximately 200 tonnes of butter were sold for a reported price of €6.925 per tonne. Anyway, the butter market almost went crazy. The quotation rose by almost €500 per tonne to €6.620 and the cream price also increased. Which, given recent history, feels like the world turned upside down. It should be noted that the prices relate to deliveries in Q2, i.e. from April. Almost nothing is sold for closer ones anymore.
Skimmed milk powder was the other solid product that made great strides in terms of price. Last week, €3.900 per tonne still seemed quite ambitious, but this week DCA is quoting €4.000 per tonne.
Whey powder for food was €15 above the psychological limit of €1.500 per tonne, also a level not previously achieved.
Seen from this perspective, whole milk powder is almost a laggard, but it is not, because although the average price was not €5.000, the price did add €115 per tonne. Fat-filled milk powder rose perhaps the most modestly in price, fetching between €3.400 and €3.450 per tonne.
Was the cheese market the laggard? Not completely, anyway. Here too, prices increased across the board, but compared to the upward steps taken by mozzarella, the Gouda and Edam cheeses in particular did a bit poorly. This week, mozzarella ranked higher than Edam cheese and almost tied with Gouda cheese, while the volume of dry matter in mozzarella is significantly lower.
The seasonal effect probably plays a role in this. Mozzarella is often produced for the catering industry and they want to provide themselves with sufficient product for the near future.