Cheese prices once again rise fastest in the market

When it comes to cheese prices, it is clearly Cheddar that is immediately catching up. While Gouda foil cheese rose roughly 1,5% in price, Cheddar rose 4% in price, according to DCA's quotation. Good news for a major Belgian producer, among others.

The explanation for the rapid price increase is that the stocks of cheap British and Irish Cheddar are now completely out of the market and buyers for new product have to rely on continental Cheddar, which also comes onto the market in smaller volumes. In recent months, this product has always been more expensive than the British/Irish product, but now that that flow has dried up, there is little to choose from for Cheddar buyers, with the nuance that there are still plenty of Cheddar suppliers on the market. European mainland.  

Natural cheese is still lagging behind
Despite Cheddar's catch-up, Gouda foil cheese still remains overvalued when it comes to dry matter content. Foil cheese also remains relatively overvalued compared to natural cheese. It is still a few cents per kilo behind.

The heavy cheese production makes considerable demands on the available milk and concentrate. This situation does not seem to change quickly after the New Year, because - especially in the Netherlands - there are two brakes on milk production: bluetongue and the manure disposal problem. Bluetongue causes a lower milk supply. 

Two brakes on milk supply
The stricter manure standards in connection with the derogation also threaten to squeeze an increasing number of companies and force them to produce less milk. The situation is not quite the same in the neighboring countries of the Netherlands, but there too there are problems in dairy farming that can negatively affect production and keep prices at the same level. There are now virtually no surpluses of milk.

Calmer export demand
The milk powder price is clearly developing more quietly than the cheese price. Milk powder is also much more of an export product, which is highly dependent on the world market. Sales on that market are slightly slower due to a combination of competitive supply from the US in particular, less favorable exchange rates and less than overwhelming export demand. Nevertheless, slightly higher prices had to be paid for all powders this week.

The most complicated market is the butter market. The price of butter has risen steadily in recent weeks, mainly due to the much higher and sharply increased cream price. Coincidentally, the price of cream increased slightly less rapidly this week, but measured against the price of cream, butter should have been €500 to €600 more expensive per tonne (or cream would have had to drop in price by the same amount) in order to restore the price balance between the two products.

In any case, cream is still too expensive to make butter. For the time being, that problem will continue to be solved by drawing on existing stocks (and there are long-term, older supply contracts). It is not clear how long this can continue. Butter reportedly comes from increasingly exotic destinations. The tension on the butter market is also increasing because there is also heavy speculation regarding the quotation on the futures market.

Based solely on the market, there seems to be room for higher prices, but consumers should not drop out because prices are too high. That seems to be not too bad now, given the retail prices.

Prices for the semi-finished products cream and skimmed milk concentrate have risen relatively modestly this week, but they are not exactly low. Cream is still in high demand for fresh production, as is concentrate, but also for cheese. It is too expensive for powder production.

Condensed whey is relatively stable in price, although considerably more expensive than last spring and summer, when it almost had to be collected for a fee. That's a difference of more than €500 per tonne. In recent months, dikwei has again managed to maintain a reasonably fixed price distance compared to whey powder.

Due to the tight availability of milk, prices on the spot market have also risen slightly. Spot milk therefore yields more than the average factory price that farmers receive.