Temporary bottom in the dairy market, spot price lower

Yet the observation that the bottom has been reached is not a hard fact, it is more the result of a kind of consensus in the market and it appears that it will be sustainable for the next two or three months. The fact is that the very large buyers such as China have still not returned to the dairy market.
Retail contracts and drought
For the time being, however, there is sufficient calm in the market not to give in to all negative incentives. New retail contracts have been concluded, providing slightly more certainty. Moreover, the drought has hit Europe hard in recent months, which could cause milk production in the EU to decline for the first time in a long time. In such a situation, issues such as large inventories and very low prices quickly cease to be the first thing to focus on.

Tempo differences cheese
The cheese market also continues to rise, but Cheddar lagged slightly behind in terms of price development, as did mozzarella. The most significant increase was the prices for foil cheese. Perhaps this is partly because a number of promotions against the foil cheese price have also been declined. In any case, Cheddar currently seems slightly undervalued compared to Gouda and mozzarella perhaps slightly overvalued. In any case, calculated according to the value of the ingredients.

The price of butter rose this week by a relatively strong step, of almost 5%. This deserves an explanation. The butter market is still struggling with a fairly strong supply of cheap product, especially from Ireland. This product is ideal for bakers, among others, and can be purchased for around €4.300 per tonne. That is higher than it was, but this price does not carry the quotation.

Cream price makes fresh butter more expensive
The higher price is caused by the sharp increase in cream prices, which exceeded €6.000 per tonne at the beginning of this week (and then dropped again). The expensive cream caused butter producers to give up for a while, because making fresh butter became very expensive. However, there remains a demand for fresh cream, which has caused the fresh price to rise considerably.

The cream price peak is over again. The price of skimmed milk concentrate still appears to be rising slightly, mainly due to demand from Greece, among others. However, this is a very different price development than for cream.

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The prices for raw milk and skimmed milk had to take a step back. There is still good demand for these products from France and other destinations in the southern part of Europe, but the supply is also increasing.

Spot market serious option
An increasing number of companies are prepared to sell unprocessed milk on the spot market at current price levels. It is a good, serious valorization option and it keeps milk away from segments where prices are under pressure. The downside of the greater supply on this market is that prices are falling.