After the butter quotations, cheese prices are also rebounding

Little has changed underlyingly on the cheese market compared to mid-January when prices were in a downward slide. Prices for Gouda and Edam are now recovering to levels briefly below €3.000 per tonne, although the upward movement is not yet visible in the DCA quotations. Buying interest took off when buyers realized the market had found a bottom. This was preceded by a severe price drop, with prices falling to the lowest level in about five years.  

Doubt set in
After the market rose to a record level of more than €2022 per tonne in the summer of 5.000, doubts set in. There was every reason to do so, because the milk supply showed strong growth figures due to the high prices. Especially in Northwestern European countries such as the Netherlands and Germany, the epicenter of the production of yellow commodity cheeses. Concerns about inflation also gripped the market. This turns out to be not an empty argument, because several major players such as FrieslandCampina and DOC Kaas have publicly announced that sales volumes have been significantly lower in recent months. Stocks in cheese warehouses have now increased considerably again. 

Cheese prices are currently slowly picking up again. It can be seen as a logical correction after a sharp price drop, during which the market has exaggerated in a negative sense. Recovery is now following. This is partly due to dairy traders who are looking for physical product at the bottom of the market to fill their positions. A similar scenario is playing out on the butter market.

Milk supply oppressively ample
However, the milk supply will remain significantly depressed in the coming months, meaning that there is no prospect of any serious increase potential. A more stable market picture is therefore in the offing, because renewed price pressure is not an issue either. You can assume that the sluggish sales due to inflation have now been factored into the cheese prices.