Analysis dairy business
Stronger dairy prices further support milk prices
The dairy market has entered calmer waters than last week, because prices for cream and butter rose much more quietly. In the meantime, the cheese market remains stable, but the protein-rich semi-finished products and skimmed milk powders have to give up. The result of all this is a stronger substantiation of milk prices.
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The price of skimmed milk powders dropped due to crumbling confidence in the market in the short term. This appears to be due to the difficulty in exporting European products to markets outside Europe.
The Gulfood fair in Dubai last week did not improve this much, although there does not appear to be a negative impact either. For the longer term, the second quarter and beyond, the skimmed milk powder price is less under pressure. The same is the case with the forward quotation.
The 'protein weakness' has less of an effect on the whey powder market. Here prices remain broadly stable. The animal feed companies are not very active as buyers of feed whey, sales of food whey powder are continuing at a slow pace.
The price of cream, on the other hand, continued to rise, while the price of butter followed at a distance.
According to various market parties, the butter price has already passed the peak, but this is not yet apparent from the quotation. It is noted that suppliers from Ireland and Poland are entering the market with cheaper products. Of a different quality and with different properties, but that offer will undoubtedly have an effect on the market in the coming weeks.
The cheese market remains the calmest and most stable submarket in the dairy industry. There is not a lot of crowds on the market at the moment. The trade is quite tame. Nevertheless, cheese prices remain broadly at a stable level. The quotation is even slightly higher this week for most cheese types. This is partly due to good sales and the continued tight availability of cheese. The parties largely agree that there are few supplies.
The situation surrounding Cheddar cheese remains a special case. The European ranking is largely holding up, but cheap American products are knocking on the door. American Cheddar is about $1.000 per ton cheaper on the world market than the European product. There are still significant levies and customs tariffs on the way to Europe. It is also a different quality of cheese, but it is still an attractive offer for some processors.