Analysis Dairy Business
Liquid product in turn dairy market fraction
Trade on the dairy market is more difficult every week. The milk powder market seems to have almost come to a standstill. The number of transactions has fallen sharply. It is also becoming quieter on the cheese market, but the most striking thing this week is that prices there are now really falling further. Surprisingly enough, liquid dairy prices are going up, but here too the traded volumes are limited.
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In Germany, raw milk is traded for around 40 cents per kilo and sometimes even more. In the Netherlands the price is slightly lower on average, but hardly any significant volumes are traded here. The factories that can process in-house do so.
After several weeks of sharp price drops, cream also became slightly more expensive again, and therefore moved in a different direction than butter, the price of which continued to fall.
The butter market currently seems oversupplied. There is hardly any demand, but there is a fairly cheap fresh supply from several sources, but there is also a supply of stored and/or frozen products.
The latter product often comes from traders who need to free up cash and therefore offer product that was previously purchased at higher prices, but will now no longer be sold quickly in any other way. A lot of butter was purchased in the first half of the year in the expectation that there would be a lot of demand for it in the second half of the year, but that expectation does not seem to have come true.
Relatively the strongest price increase occurred for skimmed milk concentrate, where the DCA quotation rose by €95 per tonne (almost 5%). This has nothing to do with the milk powder market, but more with the increasing demand for fresh production. Time will tell whether this effect is here to stay for the time being or not.
The market for milk and whey powders is almost completely at a standstill. Traders barely book any transactions, while the price continues to slip. The listless mood means that there is a considerable spread in terms of sales prices.
The mood at the cheese market now seems to have really changed, although this is a difficult observation in the middle of summer time. There has been pressure on prices and little buying interest for a long time, but this week prices for Gouda and Edam foil cheese have fallen by about 5%. The mozzarella price also fell further. Cheddar cheeses also became slightly cheaper, but here the movement was still virtually negligible.