Dairy market is slowly returning to farmers

Now apparently almost everyone wants to quickly buy additional product, before it becomes even more expensive, with a predictable consequence.
The price increases so far have not been very spectacular, but they are certainly price increases with an impact. While raw milk barely yielded €30 per 100 kilos on the spot market at the beginning of May, the price is now around €35 ​​per kilo as an average, but this week up to €38 per 100 kilos has also been paid in the Netherlands.

Commodity value and spot market
That is only a good €2 off the milk price that farmers receive from one of the Dutch processors. What is just as interesting is that the spot market price and the raw material value price are close to each other for the first time in a long time.

The price increases for cream and skimmed milk concentrate are certainly not pleasant this week, expressed in euros. Cream became more expensive on average by €315 per 1.000 kilos at €5605, the DCA quotation indicates. Skimmed milk concentrate increased in price by €225 to €2105.

In all this violence, Butter took it a little easier. This may seem strange at first glance, but this has brought the prices of cream and butter back into balance, and the demand for butter is now slightly smaller.

Due to the strong increase in the concentrate price (throughout Europe), the milk powder price also had to rise. However, when processed into milk powder, there is not much margin left. There is now enough room for the sale of skimmed milk concentrate; in fresh production and also for export to countries such as Italy and Greece. With the arrival of the tourist season and the warmer weather, there is now a greater need for fresh dairy.

Whey powder is not yet really participating in the improving market. Those who want to dry dairy products are still more likely to choose skimmed milk powder than whey powder. After drying, more margin remains for the first product.

There remains a sufficient supply of concentrated whey, because the cheese dairies are running at full speed. Cheese production remains the most profitable for the dairy industry (at least for the major commodities) and the market has continued to rise slightly in recent weeks. For the third quarter, cheese manufacturers are already asking prices of €3,60 and more per kilo for Gouda foil cheese. The price development for mozzarella is barely lagging behind.

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Hardly anyone dares to say whether this development will continue. Is the price development based on down-to-earth facts, or is it emotion? Opinions are divided. However, the market does not stop.