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Analysis milk

Spot milk and cream are expanding the liquid market

25 July 2024 - Klaas van der Horst

Spot milk has suddenly become considerably more expensive this week and is therefore slightly above the average of factory prices. It happened under the influence of a decreasing supply in both the Netherlands and Germany. Large volumes are therefore not involved. Cream and butter also rose in price, but proportionately less than spot milk.

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Meanwhile, skimmed milk concentrate has fallen slightly in the DCA ranking. This product remains in high demand, but a larger supply is available. It is often a by-product of cream production, which is running at full speed.

More milk could be lost, but that is not happening now in the middle of summer. Businesses are not running at full capacity and many traders are on holiday. Yet it is fortunate that demand does not drop completely, as was sometimes the case in previous summers.  

Roll of cheese taken over
Cheese has often supported the basic dairy market in the past year, but due to the sharp increase in cream and, to a lesser extent, butter prices, the value of the cream and skimmed milk concentrate package is currently better than that of the cheese and whey package. A point of attention is the rapidly rising prices for whey concentrate. For a long time, whey barely played a role in dairy valorization, because the product was so low priced.

Its price has risen sharply in the last few weeks, due to a combination of factors: slightly less cheese production, more powder towers released and a strong demand for high-quality whey powders.
According to some, it is almost becoming interesting to make cheese again because of the whey. It is not yet that far, but the whey is certainly a product to keep an eye on. The price of regular 'livestock feed whey' is still not changing much. This market is under pressure from large stocks of older product.

There is still little happening on the milk powder market. Especially in the short term. There is more hope for higher prices for next autumn. The expectation is that there will be a lower milk supply than now and the situation of supply pressure will have disappeared by then.

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