Raw milk market rises from January depression

In practice it is visible that prices are moving towards each other. Freely available raw milk and cream have become more expensive again, while the average raw material value of milk continues to decline and the milk prices paid to dairy farmers are also falling. However, they do not sit together yet.

The rebound in free liquid dairy prices is attributed to a combination of factors. The dairy market, like many other markets, is partly determined by sentiment. Immediately after New Year's Eve, that sentiment was quite negative. As a result, buyers continued to hold off on concluding new agreements, even as existing stocks dwindled.

So there was an overreaction, which faded away in recent weeks. The prices of some solid dairy products also stabilized. In addition, new demand for liquid products arose from, among others, Southern Europe. 

What remains exciting is that the milk supply from the primary sector is relatively strong and will continue to increase in the coming months, reaching a peak somewhere in May. That is the traditional seasonal pattern.

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For now, this does not hinder the recovery of liquid dairy prices. However, the prices of skimmed milk concentrate (widely used for fresh dairy) remain relatively slightly behind. The price of cream is making significant increases, but is still slightly behind butter in terms of valorization. The question will soon be which product price will influence the other; the cream price moves more towards butter equivalent or vice versa.