Spot milk price more explosive than expected

The DCA spot milk price in the Netherlands has recently risen again to €43 per 100 kilos, or even above the level of the payment prices. This means that the imbalance in the market that was visible for a long time has been restored. Spot milk prices are also moving around the long-term average again. The price of cream has also been increasing quite rapidly in the past few weeks.

Declining milk supply
Price increases on the liquid dairy market are not unusual at this time of year. After all, milk supply has been declining for a few months and is heading towards the seasonal low. The oversupply on the liquid market that plagued the market during the seasonal peak in May has now faded into the background. The market is even showing signs of scarcity, without major shortages lurking. At least in Northwestern Europe.

In countries such as France and Italy, the milk supply has been hit by the extreme heat in July and August, with temperatures sometimes rising to 40 degrees or more. Due to heat stress in the stable, production drops like a stone. In recent years, surplus French milk was often 'dumped' somewhere in Europe, but at the moment French processors are eagerly looking for milk and cream.

Further price increases
The seasonal revival on the liquid dairy market is therefore faster than expected. Historically, we can also expect further price increases in the liquid dairy market in the coming weeks. With the exception of skimmed milk concentrate prices, where the recovery is being held back by the weak milk powder market. In addition, cream and spot milk have no support from the solid end products that often move stably, so a price explosion is not expected, although prices this week are even rising towards €50 per 100 kilos. This makes the market much more explosive than expected.