Analysis Milk
Cheese contrarian in further declining market
While most dairy prices are maintaining the downward trend of recent weeks, cheese prices are behaving in the opposite direction. These prices have actually risen in the last week, with mozzarella as the frontrunner.
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Cheddar, on the other hand, feels the weakest. The recovery in prices is felt slightly more in the Netherlands than in Germany, for example. The market there is good, but it also seems a bit more stable.
The increasing demand seems to be due to several factors. First, buyers need to start hedging for the fourth quarter. In addition, various parties are also starting to worry about the volume purchased for Q3. Has enough been achieved? This seems to be the reason why several consignments of cheese have been traded for short-term delivery, especially in the last week. Concerns about persistent drought in large parts of Europe also play a role in the background.
Lean powder leaves spring
In the meantime, milk powder prices are under further pressure in a weak market. Skimmed milk powder in particular had to suffer again this week. The whey powder price fell only slightly, with the price gap between whey powder food and feed still remaining, although it is smaller than about three weeks ago.
The price of butter also remains in a downward trend, but fell less sharply this week than the price of cream. The price difference has fallen from just €1.500 per tonne about two weeks ago to around €1.300 now.
The price of butter may have fallen by several hundred euros per tonne in recent weeks, but compared to New Zealand, the price of butter in Europe is still very high. For example, the DCA quotation this week stands at €6.853 per tonne, while the latest GDT quotation for butter is around €5.445 per tonne. The importers who have purchased New Zealand product - there are loads on the way - may still be able to make some margin.
The quotation for skimmed milk concentrate has fluctuated somewhat in recent weeks, but has fallen again this week. However, the average price has remained quite stable in recent weeks, which is a sign that there is still good demand for dairy in general. Concentrate has gradually become too expensive for the production of skimmed milk powder, but it is still perfectly suitable for fresh production or cheese, for example.
Drought care in background
Broadly the same story applies to raw milk. In the Netherlands, the supply is excellent, perhaps even slightly higher than at the same time last year. Elsewhere in Europe this is no longer the case, because there is simply too little growth and therefore less milk will be produced.