Spot milk more expensive, the rest of the dairy market is cooling down

The cheese market, which is so important for the milk price, appears to be weakening. The DCA quotations for Gouda and Edam foil cheese are still going up, but the confidence of the past few weeks is no longer there. The major producers are still keeping their prices high, some say too high. Much cheaper lots are sometimes offered left and right. Suddenly there is a product that still needs a buyer.

The weakening market is much more noticeable with mozzarella and Cheddar.

This does not mean that the cheese market will go in the other direction from now on. A lot also depends on the weather in the coming weeks, and therefore on the milk supply. A drier summer with tighter supplies would not be bad for the cheese price and for the dairy market as a whole. At least, not for the selling side. It's a different story for buyers.

The situation outlined in the cheese market is, to a certain extent, also the same in the powder market. The difference is that milk powder prices have been fluctuating between narrow margins for months. There isn't much music in this regard.

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Anyone who wants to export must be able to offer competitively. Above €2.500 per tonne it is difficult to get rid of skimmed milk powder on the export market. This is still possible between €2.400 and €2.450, but then the margins are narrow and there is still no great demand. Inventories are gradually building up. Parties (also in Europe) that find skimmed milk powder too expensive sometimes look for cheap protein alternatives such as WPC35 to mix in. Of course, that doesn't help you get rid of a lot of lean powder.

Yet most buyers are not hedged for very long, something that is also said to be happening on the cheese market. Parties are holding back and that does not help the dynamics on the market. Trading companies are already almost preparing for a long summer slowdown. All in all, the milk powder market is moving a bit sideways.

This is even more the case on the whey powder market. There the price development is almost as flat as a plank. A major buyer such as China is absent and the rest of the buyers are either sufficiently hedged or purchase piecemeal. There is no shortage of supply.

Two different trends can be observed for the semi-finished products cream and skimmed milk concentrate. The cream price went up considerably last week, but is now on the way back. Skimmed milk concentrate is moving in the other direction, but the results are small compared to previous weeks.

Raw milk became more expensive due to a declining supply. The spring peak is now clearly behind us. This will automatically create more room for higher spot prices, for example through greater exports of raw milk and concentrate to Italy and Greece.

It is remarkable that the North German price is higher than the Dutch spot price. Usually it is the other way around.