Spot market deceptively quiet, prices low

On the eve of Easter, everyone wants to take a step back. Major business has been done and the dairy is already doing its best to keep the spot market for raw milk as clean as possible. The pressure lies elsewhere, on the milk powder market and butter.

Differences are slowly shrinking
There are still major differences in the dairy market in terms of valorization and payment. Dairy farmers can be happy that they still receive considerably more milk money than their product would now yield if directly converted into butter and milk powder and certainly much more than can be obtained on the spot market. 

For the rest, it is expected that there will be continued pressure on dairy prices. This is only partly reflected in cheese prices. Relatively little happens in the cheese trade. The demand for mozzarella in particular is weak. This is partly attributed to the fact that the warmer weather does not really want to continue.

Two trends are visible on the market for Edam and Gouda foil cheese. Trade as a whole is also quite lethargic here. For the longer term, caution prevails, so buyers do not want to commit too much and do not have much desire to pay a price that may be too high. There is still some demand for prompt delivery from parties who have waited too long and who now have to pay a higher price.

In the case of butter, stocks also increase when prices fall sharply, but this is partly as a reservation for the autumn and winter period. For another part, however, this is also because parties would otherwise have to take a major loss. Reportedly, several parties even bring butter to Poland for storage. That does not seem very sustainable, especially because Polish and Irish butter is now also coming onto the market here, but these products are a bit cheaper and are not always suitable for the same applications as Dutch butter.

The export of butter is now limited due to the high price of the European product. There are still some export opportunities such as butter oil. The whey market has generally been quite quiet for a long time. This is due to the weak demand for whey powder, which is why the whey powder price is and remains low. As a result, not much whey powder is added in the meantime, even though the cheese makers are working at full speed. The problem is the high drying costs.

As a result, it is often more economically attractive to sell the thickened whey directly as animal feed or to let it ferment than to dry it. Anyone who wants to dry dairy products will therefore often prefer skimmed milk concentrate over whey concentrate. After drying the first product, a positive margin usually remains, but not after drying whey.