Lower butter and powder prices hurt dairy

The DCA butter quotation fell this week by more than €400 per tonne, the cream quotation lost more than €200 per tonne.

Parties in the butter market are discussing whether the current wave of price drops is the result of speculation or whether there is really suddenly an abundance of butter in the market.

Sudden surplus or speculation?
The fact is that the product is suddenly offered considerably cheaper. In a few months it will become clear whether those with many open positions can actually find product there. Butter prices for Q1 are quoted at well below €6.000 per tonne. The question is whether a possible revival of the market in connection with the Christmas holidays will change anything.
 

Cheaper powders, little more exports
After butter and cream, significant price declines were also recorded for skimmed milk powder and whey powder for human consumption. These declines do cut into the earnings of producers or parties with stocks in the warehouse, but they do not yet result in increased exports. The price of the product is still too high for the world market. Moreover, major importer China is still very absent as a buyer. For many other export destinations, milk powder is still not a very cheap product, although affordability is increasing.

 
{{dataviewSnapshot(46_1667490480)}}

The cheese market is also gradually paying less for the product, but here the price drops are slower than for powders and butter.

No more Gouda prizes with a 5
The time is now over when Gouda and Edam foil cheeses were still sold for a price starting with a 5. The DCA quotation is even below €4.900 per tonne. Foil cheese with a Frau Antje label remains on average around €100 per ton more expensive, but some manufacturers offer more discounts than others. Mozzarella fell the most in price, partly due to an ending season. Cheddar and also Emmentaler and Maasdam remained more competitive. 

With all the price drops, it was even more striking that the price for skimmed milk concentrate rose again this week. There is no good explanation for this, but it was a phenomenon that was not limited to the Netherlands. The product also suddenly became more expensive in neighboring countries.

Skimmed milk concentrate is too expensive at current prices to make milk powder, so it will probably be used for fresh production.