Dairy prices down more slowly, sometimes bottoming out

These are the broad outlines of what happened in the solid dairy market this week. There are not many real bright spots for fans of higher prices. This obviously plays a role in the fact that these are now the weakest weeks of the year in terms of trade. Producers offer little, traders take leave, consumers are partly elsewhere, usually more in the south.

There is therefore some additional demand from Southern Europe, but that is not strong demand. According to many, temperatures in Southern Europe are too high for high dairy consumption. On the other hand, the heat and drought in Southern Europe are putting pressure on milk production there. This could eventually lead to greater demand from Northern Europe.

This is not yet so noticeable, apart from a slightly higher supply of skimmed milk concentrate. Prices for raw milk in southern Germany and France are also higher than in northern Germany and the Netherlands. That is normally the case, but it is not a fixed fact. Earlier this year, the situation was even the other way around for a while.

The DCA cream quotation is slightly lower this week than last week, but remarkably the butter quotation is actually a little higher. The sentiment is that the butter market has turned slightly, although it is impossible to say for how long. Market parties believe they are seeing a certain stabilization of the market and a little more demand here and there. 

In the meantime, the export market remains difficult and appears to have little prospect of improvement. In importing countries, purchasing power is often weak, while there is product on offer from all kinds of sources, not only from Europe or New Zealand, but also from the US and partly South America.

Prices on the whey powder market have become very low in recent weeks, especially for feed product, but the supply of whey concentrate appears to be decreasing slightly and prices are rising slightly. This could reduce some of the existing pressure on the market.