Cheese rises in 'thin' and weak dairy market

However, the increase in prices for Gouda and Edam cheese in particular is striking. It would have been expected that cheese prices would fall along with other dairy prices. But apparently buyers have been too cautious and did not sufficiently hedge themselves before the summer. The current demand is still partly for short-term delivery. Cheese producers take advantage of this situation by raising their prices.

It is mainly the Gouda and Edam cheeses that are increasing in price, but mozzarella is also benefiting slightly from the increasing demand. There is no visible improvement in demand for Cheddar yet.

It is expected that this situation of rising cheese prices and falling powder prices will not last for very long, especially if the price of milk powders continues to fall, as was seen at the GDT auction earlier this week. For the time being, such an effect is barely noticeable. Although Arla has sold several hundred tons of skimmed milk powder on the GDT for prices slightly above €3.400 per tonne, the DCA quotation for skimmed milk powder food this week is still well above €3.600 per tonne.

Food and feed prices are closer again
It is striking that feed prices for both skimmed milk powder and whey powder rose slightly again this week, bringing them closer to the food variants of these products. Apparently feed prices had previously gone down a bit too much. These types of corrections can also take place in a normal market, but they also seem somewhat typical of the current 'thin' market in a holiday mood. Small deviations can sometimes lead to relatively large changes, which are later corrected.

The butter price is remarkably stable compared to the movements of the other major products. There is some change, but actually marginal. European butter is clearly priced higher than on the world market, for example almost €2.000 per tonne more expensive than in New Zealand. Yet there do not appear to be many threats to the butter price. Demand has not yet collapsed, there is no buyers' strike, but on the contrary there is still a shortage, especially on the French market.

The cream price rose even further this week. Skimmed milk concentrate, on the other hand, had to give up. However, this product is not far off the longer-term average of the last few months.

Raw milk prices show varying trends. In the Netherlands they are slightly weaker, just like in Northern Germany, while in Southern Germany they increase. On closer inspection, this is not surprising, because the further south Europe is, the more the effect of the persistent drought is felt. The milk supply is declining the most in the south. That is also the reason why more and more dairy products are crossing the Alps to Italy from, for example, southern Germany.