Cheese price remains surprisingly strong in a weak market

This is not a spectacular price increase, like last year, but given the market situation at the end of January and also given milk production in Europe and the relative weakness of other basic dairy products, the cheese price is holding up very strongly. It is difficult to pinpoint the exact cause of this. There is plenty of milk available, plenty of cheese is also being made, but there are also no large stocks. At least not from foil cheese. That would also be difficult, because the product would then have to be frozen and would only be suitable for the melter.

Now there are stocks of cheese that are actually too large, but they are available with natural cheeses. The volume of this is so large that the price advantage compared to foil cheese is gradually being sacrificed. That is why producers are working hard to get surpluses off the market, it is reported. Sales far away are often an effective remedy.

'Analogue' fats expensive
In the meantime, demand for foil cheese remains good, which may partly be caused by the relatively high price for vegetable fats used in the production of 'analog' variants. As a result, these variants, which are often used in food preparations, are no longer price-wise competitors for cheese based on milk alone.

The question is whether the current position of foil cheese will remain intact in the next few months. Vegetable fats do not seem to be getting cheaper any time soon, but the milk supply will increase sharply with the start of the grazing season, which means even more cheese. Moreover, cheese almost exclusively has to ensure the valorization of milk. The market for whey and whey powders is still in dire straits.

The milk powder price is much weaker and also much more dependent on export opportunities. Currently, only limited exports take place. As a result, stocks are building up, but there is a chance that better export opportunities will arise later in the season. Competitors such as New Zealand and a number of South American countries are approaching the end of the production season, which means that supply from the United States must mainly be taken into account. This means that there is a lot of competition in some markets with less purchasing power, but that is not the case everywhere.

Profit cream gone
In liquid dairy, prices for both cream and skimmed milk concentrate fell this week. That of the latter product is still quite limited - although there is also extra cheap supply available from France, the cream quotation lost much of the profit that was made last week. The supply of both semi-finished products is more than sufficient.

This is less the case for raw milk, which is why the price rose again. Opinions are divided as to how tight the market for spot milk was.
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Most parties see less availability throughout Northwest Europe, others see it mainly in the Netherlands, which can sometimes increase prices to 3 or 4 cents extra.   

The DCA spot price for raw milk has been (and often significantly) below the payment price of the factories for almost a year now and that is usually a clear sign that there is an oversupply.