Price pluses and pluses on a large part of the dairy market

The liquid market is clearly in recovery mode this week. Recovery from the dairy actions last week and recovery due to nicer spring weather, which means that fresh dairy is doing better.

This clearly plays a role in the raw milk market. For the first time in a long time, additional product from the north is being requested from Southern Europe. More trucks with raw milk, skimmed milk and also skimmed milk concentrate are going to Italy, Greece and other southern destinations. That relieves pressure on the market here, as does the absence of industrial action at the dairies this week. At the end of last week, the spot milk price fell to around 20 cents. This week, prices have recovered considerably.

The market for cream and skimmed milk concentrate has again recorded the strongest price increases this week, successively 6,4% and 15,2%, despite the aforementioned high spring supply of milk. It is difficult to pinpoint a reason for this. Various explanations are mentioned, such as that much of the current production has already been committed, so there would be little free product. The better spring weather would also play a role.

With the rise in the cream price, the price of butter also rose slightly this week, but butter is still overvalued compared to cream, or cream too cheap compared to butter.

Another striking fact is that butter for prompt delivery is also much cheaper than the price on the futures market. Those who have money to buy now will save money later.

The powder market presents a mixed picture. The skimmed milk powder market is quite competitive at a global market level. If you want to export, you have to offer quite competitively, producers notice. It is therefore not without reason that European skimmed milk powder, sold for Algeria tenders, is supplied by Polish producers, and not by Western European traders or producers. According to traders, buyers from the Middle East are also 'very keen' in the market.

In the meantime, exports are necessary, because the dairy industry cannot survive on domestic demand in the EU alone. Then too many surpluses build up and the market goes bankrupt.

Whey and derivatives
The prices for whey powder and the higher whey derivatives are increasing more. Strongest in the futures market (but the futures market for skimmed milk powder is also much higher than the prompt delivery market, so that doesn't tell the whole story). Whether this is here to stay remains to be seen.

Prices on the cheese market are going up again. The question is how long this can continue. A lot of milk is already going into cheese production, but more may need to be added in the coming weeks, because the peak of milk production does not yet appear to have been reached. This also means that a fairly large volume is being marketed and it is becoming increasingly exciting to maintain the right balance of production and price.

Customers also see what is happening. Rumor has it that retail will pay less for cheese from July. It will be an exciting question what this will do to cheese prices for the market as a whole and what it means for payment prices. After all, cheese production 'supports' the dairy market to a large extent.