Analysis milk
Cheese last stable riser in further divided market
In a dairy market with sky-high prices, there seems to be no collective direction for a while. The powders are priced slightly weaker, butter also sags slightly, but creams up slightly. The rest of the liquid segment looks divided. Cheese prices are the only ones continuing to climb steadily.
Read this article?
Become a subscriber and get instant access
Choose the subscription that suits you
There are also some signals here that not everything is going up. There may be cheaper spot offers here and there for this month. However, the broad picture for cheeses is still 'bullish', with mozzarella remaining the top performer.
Mozzarella still provides by far the best value for milk among dairy products. Skimmed milk powder and cream/butter is always a good combination, but the slightly declining prices for skimmed milk powder make this combination a little less interesting. It does help that the cream price has rebounded slightly.
The fact that the price of skimmed milk powder has fallen slightly does not surprise many traders. Skimmed milk powder from the EU has become too expensive for the world market, and some product has to be sold to keep the market 'clean', it is said. Not that there is any serious stock building, by the way.
Inward processing
A number of traders who want to continue selling to customers in Africa and Asia have therefore already looked into whether they can do something with cheaper American product, which must be resold via the so-called method of 'inward processing' (processing outside customs). However, much depends on how exchange rates develop. If the dollar becomes more expensive compared to the euro, there will not be much margin left.
The quotation for whole milk powder also fell slightly this week. It is remarkable that the whey powder quotation suddenly picked up slightly again after a short dip.
While the cream price rebounded slightly, the butter quotation fell a step further this week. Skimmed milk concentrate also fell in price, which appears to be in line with the movement in the skimmed milk powder market.