Liquid dairy cushions the blow from the Christmas slump

Food companies and exporters can already buy cheaply. Especially compared to a few months ago. But many interested parties opt for a wait-and-see attitude, hoping that the market will fall even further. According to market parties, there is a fairly limited trade. This also has to do with the fact that most things have already been done for this year. By contrast, not every buyer is foreseen for the first quarter of 2023. 

Prompt delivery still pricey
If you want a product for prompt delivery, you still have to pay a relatively high price. For example, butter for delivery in the first quarter of 2023 is sold for prices around €5.500 per ton, depending on quality and further specifications, but those who want a batch of butter now still have to pay around €6.000, according to various sources. parties. Similar situations also apply to other products.

After butter, cheese and milk powder, it was the liquid products that had to deal with sharp price drops this week. The most notable movement was that of cream, the price of which went up last week. This week it went the other way, with a large spread in the registered prices. Prices ranged from €7.000 to €7.700 per ton.

Room relatively overvalued
Regardless of the price, however, cream is still significantly overvalued relative to butter. There is a gap of €1.800 per ton between the DCA quotations, where about €1.200 more would normally be.

Quotations for raw milk and skimmed milk concentrate have also fallen considerably. Still, skimmed milk concentrate remains too expensive for most powder manufacturers to dry. Energy costs are too high.

Skimmed milk powder in itself is competitive enough to attract buyers to the world market due to the continuing price decline, but there does not seem to be much export yet. Parties that have stocks of milk powder must first be prepared to write down their product.

Drying costs make powdering unattractive
Many parties that can make fresh powder will not be eager to do so, because the drying costs are high. Nevertheless, batches of milk powder are offered here and there at current prices. For European buyers, the offer does not seem unattractive. In just a few months, the milk powder price has already dropped significantly.

The whey powder market is slowing down in the meantime. The prices for whey powder for human consumption have fallen in recent weeks, but the prices for whey powder feed have remained very stable, possibly partly due to the relatively high drying costs.

On the cheese market, the price decrease for Gouda and Edam foil cheese was somewhat calmer this week, but the direction remained the same. The price still remains above €4.000 per ton, but some players already foresee significantly lower prices for the new year. It's hard to say whether they'll get it right on their side. With the still increasing milk supply and the high drying costs for milk powders, a persistently high cheese production seems an obvious option. The last word on that is up to the market.