Spot market milk remains weak, semi-finished products slightly more expensive

The DCA spot quotation for raw milk for the Netherlands remains virtually stable, in Germany the market seems to be hesitating between staying the same or falling. Traders believe that there is slightly more demand, but the supply of milk is quite large anyway.

In any case, spot milk, with a price somewhere between €0,41 and €0,45 per kilo – depending on the region – is far below the payment price of the factories. Prices for semi-finished products, especially cream and skimmed milk concentrate, are picking up again.

In the meantime, price declines continue in the solid dairy market, which produces large volumes. Skimmed milk powder became cheaper again this week and the price drops on the cheese market appear not to be over anytime soon. Gouda foil cheese costs around €3,50 per kilo, depending on the origin and seal. Mozzarella is slightly lower in price.

Cheddar and Emmentaler, cheeses with a higher dry matter content, fare slightly better. The Cheddar price is €90 to €100 more expensive per tonne, but this price is also still falling. Even traders are concerned about the pace of price decline.

It seems advisable for manufacturers to allow less milk to flow into the cheese container and to switch on the powder towers again. The high drying costs are also a problem for whey. It is therefore telling that whey concentrate is often sold at rock bottom prices. That is not unique at this time of year, but it is a signal.

The lower whey powder prices are favorable for the animal feed sector, but too low prices can also lead to a shortage of whey powder for animal feed in the long term.

Rising concentrate prices indicate that more drying towers are being activated. The problem for manufacturers is that the milk supply remains relatively high in Northwestern Europe and that relief can only come from two directions: less milk or more exports. The first is not what dairy farmers seem to be ready for yet, and the second is not easy either.

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Milk powder prices have also fallen further this week, after a relatively stable period at the end of last year. For the export market, we must hope for greater purchasing pleasure from China. The signals are not yet clear.

The butter price was relatively stable this week, but it remains difficult to indicate whether it will remain that way. With the current milk supply, there is a good chance that this price will also come under further pressure. The new year is still young and the market needs to get going again.