Analysis Dairy
Liquid dairy is skyrocketing amid tight supply
Liquid dairy, led by raw milk, caused a stir in the dairy market in the second week of the year. The combination of tight availability and good demand caused the spot milk price to rise by many cents per kilo. The solid dairy, on the other hand, lost its luster. Cheese prices stagnated, butter became slightly cheaper and milk powder continued to do what it was already doing: drop further in price.
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Raw milk became considerably more expensive, especially in the Netherlands. Anyone who wants a relatively small volume has already paid a plus. Those who want a lot more pay a lot more. It is not guaranteed that this situation will remain this way. There is a lot of nervousness in the market.
Cream and skimmed milk concentrate also rose sharply in price. Just like last week, the concentrate price increased relatively the most this week (compared to cream).
The product has actually become much too expensive to make milk powder, unless it is necessary to meet delivery contracts (and therefore volume obligations) that have already been concluded. However, concentrate can also be used for other products.
On the market for milk fat, prices for cream and butter moved away from each other again, returning slightly more normal market conditions. Last week, cream was relatively cheaper than butter, but now this has largely been corrected.
Most other types of cheese also stabilized somewhat in price. One of the exceptions was Emmentaler, some of its existing stock reportedly lost or had to be written down due to a recent warehouse fire.