Dairy products can bear the milk price again

This is not yet reflected in an indicator such as the Kieler Rohstoffwert. This is a month to a month and a half behind the current market and - in a relatively small detail - reflects the German market slightly more than the Dutch market. Producers and traders are already receiving a value of around €41,00 to €43,00 per 100 kilos of milk on the back of the proverbial cigar box.

Not all liquid dairy stabilizes or decreases in price. Cream and skimmed milk concentrate continued their upward trend. This is mainly caused by a good demand for fresh dairy, also from Southern Europe. Concentrate is (still) too expensive for milk powder production, despite the increased powder prices. Cream is too expensive to make butter.

There is still little movement in the butter quotation, but according to market parties this is only a matter of time. As with skimmed milk powder, the available supplies here are also dwindling rapidly. This goes both ways: due to the high cream prices, no (free) fresh butter is actually made, while the increasing demand also means that old stocks are being sold out extra quickly.

Things are very different on the powder market. While milk powder was a bargain for the food industry and a burden for producers and traders who owned it just two months ago, the situation has now reversed.

Exports are picking up strongly
Prices for these (commodity) powders are increasing by €50 to €100 per tonne per week. The strong revival of demand from the world market in particular has a strong hand in this. Traders see good sales opportunities almost everywhere: in the Middle East and (North) Africa and Asia, but also in a country like Mexico. Europe benefits from a reduced supply there from New Zealand and the United States. The latter party exports less to Mexico, while price levels do not vary much.

This gives European exporters opportunities in a market where they normally do not have much of an opportunity, at least not with milk powders. New Zealand is also less present on the world market because this country is suddenly seeing a lot of demand from China again. In the food business, many medium-sized and smaller parties appear not to have fully covered their needs for Q1 of the new year, it is heard. However, the prices at which product is currently hedged on the futures market (around €3.000 per tonne) do not seem very realistic to many parties.

whey powder
In addition to skimmed milk powder, the whey powder price is also benefiting from the improved market conditions. Both food and feed whey powder prices have risen sharply. This is also reflected in the price development of liquid whey concentrate. For most of the year this product was almost free to collect, but now the price is €500 to €600 per tonne.

Fat-filled milk powder participates slightly less. Whole milk powder also takes things a little easier.

Gouda extra appreciated
Gouda and Edam foil cheese continue to rise in price on the cheese market. According to some parties, prices for traders are rising even more than for producers, which seems possible because producers are at the top of their production capacity. Here and there, producers ask to deliver later, or so the story goes.

The price development of Gouda and Edam foil cheese contrasts with that of Cheddar. There the price is actually falling further, although a bottom appears to be being reached here. Calculated in terms of dry matter content, Cheddar is in any case significantly undervalued. The cause of this is anyone's guess. Changing consumer preferences may also play a role.

The price of mozzarella is also under some pressure, but that is not surprising given the time of year. Sales of ready-made products continue, but demand is smaller in the catering and food service sectors.