Room prices through the roof during the calm summer period

The DCA quotation for cream was just shy of the €9.000 per tonne mark. The butter price is also at a peak, but still remains below the record of spring 2022. The cream price is €55 over the old record.

The difference between the cream and butter quotations is now greater than in 2022. There is now a gap of €1.630 per tonne between the quotations for cream and butter, compared to €1.520 per tonne at the time. This large gap does not really encourage extra butter production, as unprocessed cream yields much better. It is therefore expected that the butter price will rise further, because the shortage will continue to grow. It is not without reason that the futures market price for October is already around €7.600.

It must be said that the price record was achieved in a market with a small supply, but perhaps that is precisely why. The milk supply is decreasing, the shortage on the market is increasing.

However, the shortage is not reflected everywhere in the market. Skimmed milk concentrate, what remains after the production of cream, has been virtually stable in price for months and barely moved this week.

And unlike with cream and butter, this is not a record or approaching record at all. Skimmed milk concentrate is even trading at €1.650 per tonne below the record of spring 2022. There is therefore not much that can be made from it that will generate a lot of money. Skimmed milk powder is and remains poorly priced and not expensive enough to powder concentrate for it. The most important sales flow is for the fresh market.

Spot milk higher, not a record
Raw spot milk is well priced and slightly more expensive this week than last week. The price also remains above the average payment price of the factories. Yet the spot milk price does not break any records. Although the availability of raw milk is limited, those who do not need to buy the product often do not do so. Milk costing more than 50 to 51 cents per kilo is still quite expensive for many parties. However, those who need milk of a certain quality quickly usually pay the higher price, whether that is 54 or 55 cents.

It does not mean that cheaper milk cannot be found, but then one has to settle for a different quality. In France, milk can still be bought for 45 to 46 cents per kilo, traders report. As a rule, it is milk with a much lower fat content, but the levels in Dutch, Belgian and German milk are also declining rapidly.  

Large volumes, also higher price?
The big question is whether and for how long the current price increases will continue. The prices are high, but the volumes sold are quite small. The interesting question is whether the high prices will hold up if major buyers, such as retailers and large food companies, put pressure on the market. The fact is that the current price increases are not limited to the liquid market alone. It is also not just a party on the milk fat market. Cheese prices are also rising sharply, while prices for higher whey products have been strong for a long time. And even milk powder prices are rising slightly, despite a number of disappointing export contracts.