Analysis dairy
Dairy spot prices offer low-level resistance
Although the prices of many basic products in the dairy market are low, their actual level and the stable to slightly higher trend since Easter seem to surprise many in the market. Feelings and reality are not in sync.
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Unfortunately, this situation does not benefit dairy farmers much, because the level of spot milk prices in question is still far below the milk prices they receive. The prices are also below the value level, as calculated by the Institut für Ernährungswortschaf (IfE). all prices fall, but the gap between them barely shrinks.
Back to the situation on the spot market. Whether it is due to the expectation that prices would fall after Easter and that the availability of milk and dairy products would increase, while that does not happen - image and reality differ.
There is limited availability of raw milk as well as cream and skimmed milk concentrate.
The price of raw milk remained broadly stable, although a slight upward movement is noticeable. Prices for cream and concentrate clearly rebounded.
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Butter also became slightly more expensive. Stories have it that Dutch producers also 'held the milk' this week, or did not issue quotations. This may also have an influence. On the other hand, there is an increasing and cheaper Irish and Polish offer.
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Small positives are visible in the cheese market, the strongest segment of the dairy market. Prices are going up slightly. Producers are operating at full capacity, but the market can apparently handle the current cheese supply and there are sufficient orders in the pipeline.
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This may be due to the fact that milk production is lower than expected due to the relatively cold and late spring. More clarity about this is required.
The milk powder market remains the weakest link in the spectrum, but here too the signals are not entirely unfavorable. There is little trade, but parties do see various export opportunities for skimmed milk powder.
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There is still very little happening on the whey powder market. There is an oversupply of concentrated whey (not dried) for animal feed. For about €100 per tonne of dry matter, there is more fat whey for sale than anyone can handle. Dried product is actually too expensive when demand is weak.