Analysis Dairy Business
Milk powder market causes surprises
Nearly all dairy quotations are higher this week than in the previous week, but not all are coming in as expected. The biggest surprise this week is the higher price for skimmed milk powder. It rose by 3,4%. It further supports the milk price paid to farmers.
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This is evident from the weekly publication of the DCA listing for dairy. In recent months, prices for skimmed milk powder, but also for whole powder, have gradually come under increasing pressure. Last week the price for skimmed milk powder stabilized. This week the price moves up quite unexpectedly. This is because of the end of the holiday period and because of fear of a declining milk supply as a result of drought in large parts of Europe. The price for whey powder is also going up again.
Surprisingly, the price of whole milk powder is not going up, but is actually falling. This is due to limited demand and cheaper supply from elsewhere in the world. Calculated in terms of the components, whole milk powder should be more expensive, because skimmed milk powder and butter/cream together yield more.
The quotation for skimmed milk concentrate rose faster than that for skimmed milk powder this week. This makes it even less profitable to make powder from skimmed milk concentrate. That does not happen in most cases. Concentrate is usually used for fresh production, for example for making yoghurts and quark.
With regard to milk fat, the cream price rose considerably faster than the butter price. Nevertheless, the butter quotation this week also clearly came out of the rest, especially compared to the previous weeks. Various parties complain about the level of the butter price. Nevertheless, the Netherlands is by no means the most expensive country in the EU. In France, the butter price is approaching €8.000 per tonne, due to a milk and, therefore, butter shortage there.
Cheese takes it easy for a while
Cheese prices, which pushed up the dairy market for several weeks, are now slowing down a bit in terms of price increases.
This picture is expected to change in the near future. In Germany, dairy companies have concluded contracts with supermarkets at a significantly higher price level. There is talk of an average cheese price for Gouda/Edam of €5,60 per kilo from November. This is consumer cheese.
Best-performing product group
Cheese has been the most profitable commodity in dairy in recent months. With the aforementioned increases, that will increase even more.
Raw milk prices have also risen faster this week than in previous, quieter weeks. There is more demand, but relatively little supply. Factories keep their supplies in-house as much as possible.