Lower cheese prices affect milk value

On average, dairy prices still remain at a high level, mainly thanks to milk fat. Cream continues to increase in price, while butter is stable at a fairly high price. Cheese may drop in price, but it is still not cheap. The raw material value of milk has been close to 60 cents per kilo in recent weeks. This is not yet fully visible in the graph below, because the data is lagging behind. Furthermore, the figures shown are based on the German situation. Yet it gives an impression of the added value that has been achieved.

Many dairy producers have also recorded a considerable part of their production for the period up to and including the third quarter of this year in recent weeks, it is said.

Most of the Dutch milk is used for cheese production. This is also the case in Germany, although perhaps to a slightly lesser extent than in the Netherlands. The price drop is not equally noticeable everywhere in the production and sales chain. Price changes are often communicated with a delay, but certainly the major producers and a number of traders feel the pace of price decline very immediately.

Edam cheese, for example, has in some cases already been sold for €3.800 per tonne, while Gouda foil changed hands for €3.850. In the meantime, quite a few products have been sold for €4.000 or more. However, it was clear that the price had to be lowered. Producers are increasingly supplying older product, sometimes almost eight weeks old, it is reported.

The prices of mozzarella and Cheddar have also fallen.

The cream quotation rose slightly further this week, to a level of almost €8.000 per tonne, while the butter quotation, on the other hand, fell back slightly.  

The question is whether the latter will provide direction for the coming weeks. As the holiday period approaches, it is expected that trade will calm down, but the supply of butter will remain tight for a while. There will also be little new product added, because with the nicer weather most cream will be used for fresh production, not for making butter.

The market for milk powders and whey powders is very quiet and also directionless. Buyers are reluctant to purchase large quantities of product. Traders hope that new purchase orders from North Africa in particular will bring some additional movement to the market, but there is currently no real relief for producers and sellers of milk powder.

Skimmed milk concentrate, a raw material for skimmed milk powder, but also for many other products, rose sharply in price this week. The DCA quotation rose by more than 10% to €2.005 per tonne. This is partly because sales of concentrate for fresh production and for export to a series of Southern European countries increased rapidly. This is thanks to the improved tourist season. Raw milk also became slightly more expensive, especially in Germany. This largely has the same cause.