Liquid dairy plus on silent market

Skimmed milk concentrate recorded a plus of 8,4%. Not really earth-shattering, but in the current market situation and after a number of weeks of decline, it is quite a turnaround. The cream price followed with a plus of 3,6%.

In the wake of this, spot milk prices also rose in various countries, but with prices in the high 30s they still lag well behind the factories' payment prices. The spot milk price is also still below the so-called raw material value. This is based on German milk, but there are no major deviations from the Dutch situation.

The dairy industry therefore pays well above the spot milk price, but also above the raw material value (when processed into butter and skimmed milk powder).

Surprise
The rebound in concentrate prices surprised many traders, although this may not have had to happen. At the beginning of this week, buyers suddenly presented themselves from Greece and other places in Southern Europe. Because of the improved weather they wanted to replenish their supplies. This placed additional demands on a market where, attracted by the low prices in recent weeks, a lot of concentrate had found its way to the dryer. That is not because the milk powder market is so flourishing. On the contrary, according to many players, the powder trade is virtually 'dead'.

The price fluctuations that can be registered this week in the DCA and other quotations are more likely to be the result of outliers in an otherwise thin market. Yet concentrate prices have been so low in recent weeks that many traders did not want to miss the opportunity to make some profit from powdering cheap thick milk. A price gap of up to €1.000 per tonne between concentrate and skimmed milk powder provided ample reason to do so.

The picture has now changed somewhat, but powdering skimmed milk concentrate can still be a good idea, provided some trade gets going again.

Not only is the milk powder market not very animated, not much is happening on the butter market either. It is fortunate that there is not much competing product on the market besides the usual Northwestern European offering. Irish butter is still not on the market due to the very late production season. Polish butter is available, but even though it is about €150 cheaper per tonne, not everyone wants it.

The cheese market also seems quite unanimated at first. There are some pluses and some minuses in the listing, but it all feels a bit weak. Yet many parties register a slightly more upward undertone. This does not immediately lead to higher prices, but it could become more visible next week. This may be because product stocks have not yet been sufficiently replenished everywhere.