Analysis milk
Butter and powder black sheep on dairy market
The dairy market came under considerable pressure this week, even more than last week. The pressure came mainly from the skimmed milk powder and to a lesser extent from the butter. The prices of these commodities fell out of the range they had been in for months. This happened in the wake of a weak GDT auction earlier this week.
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Skimmed milk powder food dropped DCA Markets to a quotation of €3.215 per tonne, skimmed milk powder feed went down by €65 per tonne. However, the market is still very much in flux, which is why many parties are extra careful, both with sales quotes and with purchases. Many food companies that have not yet covered their needs are now choosing to wait a little longer until the dust has settled a little further.
The sharply falling powder price in turn also put pressure on prices for skimmed milk concentrate. The DCA quotation this week averages €2.745, but there is a wide spread of prices in the market. From the UK, product is even offered for around €2.200 per tonne, but that does not include transport.
The quotations for whey powder food and feed also fell, but still held up better than skimmed milk powder.
There is also a lot of movement on the butter market. The DCA quotation this week fell to the lowest level since mid-March this year, reaching €6.600 per tonne. Cream followed the movement of the butter price and, when measured in euros, even faster, but in terms of content value it is still above the butter price.
The pressure on the butter market is partly caused by the fact that a lot of cheap Irish product is coming onto the market, product that is €500 to €600 cheaper per tonne. Last week it was mainly about frozen products, this week it is also about fresh butter. Demand is also weak.
Compared to this, the cheese market is holding up well. Cheese cannot escape the general trend of lower yields, but things are a little calmer. The price of Gouda foil cheese is now just under €5.000 per tonne, mozzarella is more than €4.800 and Cheddar is around €5.500.