Dairy prices remain above commodity value

What is also striking is that commodity valuation is lagging behind. This is evident from the so-called Kieler Rohstoffwert. For July this was €35,30 (there is no calculation yet for August). For the Dutch situation, more than one euro must be added due to deviating contents in the milk, but on average the price paid for spot milk and farm milk is considerably more than can be earned from the production of bulk dairy.

There are various explanations as to why this situation is the case, but it stands out when comparing various figures in the current dairy market. There are not many positives on the dairy market this week, but a slightly higher foil cheese price is attracting attention. There are not very many stocks and slightly more demand apparently quickly translates into higher prices.

At the moment it is difficult to say how the market will develop in the coming weeks, but in North Rhine-Westphalia the holiday period is over and the demand for food is picking up. New contracts will also be concluded between the retail and dairy industry in Germany in the coming weeks. That will have a major effect on the market. There is a sufficiently large milk supply, but the cheese market is still healthy given the circumstances. Perhaps the new retail prices will also create a clear floor in the market. For the moment, prices for foil cheese in particular are increasing slightly.

Mozzarella feels relatively slightly weaker. It is more difficult to say anything about the market for cheddar. There is enough supply, demand is quiet. The market for Emmentaler, on the other hand, feels weak. According to reports in the market, too much of this was produced in the previous months.

The milk powder market remains weak, despite the fact that European parties have been able to export decent volumes of product in recent weeks and the price briefly recovered slightly last week. The prices are quite stable. The market for whey powder is also quiet, but it seems as if prices have bottomed out here. This is an observation that should be taken with caution. Many parties are still well invested in the product.

The butter market appears to be recovering slightly this week, but according to various market parties this is mainly due to transactions between traders. There is not much real demand yet, there is also more than sufficient supply of product.

Contradictory developments are visible on the liquid dairy market. The cream price fell by almost €100 per tonne, the concentrate price recorded a small increase. The latter is mainly due to demand from Southern Europe (including Greece) for fresh production.