Producers in particular are positive about the rising dairy market

After a long summer period where the trading pace was slow, there is now music in the market. Not only in Northwestern Europe, but also beyond. The higher Global Dairy Trade earlier this week has boosted sentiment worldwide. The fact that China has returned to the market as a buyer gives citizens courage. Producers in particular are optimistic about the market, or at least claim to be so. It is very important to processors to increase dairy prices and thus create a better floor for milk prices. After all, further price reductions are difficult to sell to members and suppliers. The dairy trade is also happy that the market is picking up again, but also knows that there are still many stocks. Especially butter and milk powder.

Gouda foil cheese adrift 
What stands out this week are the higher foil cheese prices, with Gouda rising to above €3.600 per tonne. Cheddar and mozzarella are taking it slower due to a wide range of foreign products. In addition, demand from the southern Member States has disappeared, now that the tourist season is over. Foil cheese benefits from good domestic retail sales. Sales to industry and food service are also continuing well. However, the thought is that price increases cannot continue unbridled. Traders doubt whether cheese stocks are as tight as described by producers. In addition, the purchasing interest among end users is not excessively great. Additionally, foil cheese is on track to overtake cheddar, but that rarely happens historically. 

Cream overrated
The butter price continues this week at €4.500 per tonne. It is not possible to advance to higher levels. There is still too much frozen butter stored for that. The increasing demand for fresh butter is giving the market energy. Cream prices also continue to rise, against many expectations, passing the €6.000 per tonne mark this week. This price increase is striking, because milk supply in Germany and France has recovered after the summer dip in August. There is, however, a seasonal production decline. Cream, meanwhile, is significantly overpriced compared to the butter equivalent. Demand from the fresh segment should also cool down at this time of year. For the time being, there remains upward sentiment, but this could also change again. After all, spot milk prices were on the decline last week, but will not fall further this week.  

Powder price from the valley
The powder market is now increasingly emerging from a deep trough, partly thanks to the improving GDT. With prices for skimmed milk powder above €2.300, the market has risen to its highest levels since July. Whey powder and whole milk powder also have an effect. Powder stocks are still estimated to be ample, but the market was probably pushed too far down in recent months. A correction is now being made.