Analysis Milk
Spot milk prices surge to 60 euros in hot market
Dairy prices have been rising rapidly for weeks and the end of the advance has not yet been reached. DCA spot milk prices are also joining the rally and are passing the €60 per 100 kilo mark this week. A new record is within reach.
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The DCA spot milk quotation for the Dutch market is rising this week by no less than €6,50 to €60,50 per 100 kilos. Only in 2022, when the commodity markets were extremely high as a result of the war in Ukraine that had just broken out, was spot milk quoted even higher than it is now. The record level is €63,50 per kilo. A new record is therefore within reach, taking into account the rapid rate of increase at the moment. And the end of the rise has not yet been reached. It is true that the spot milk quotation historically often peaks at this time of year.
Expensive freight
Cream is also on the rise and is rising to almost €10.000 per tonne. A full tanker of cream represents a value of around two and a half tonnes (!). Butter has also broken a record. Not only the fat side of the dairy market, but also cheese prices are rising rapidly. And the struggling milk powder market is also tending upwards. The raw material value of milk has shot up in recent weeks and is in many cases well above €60 per 100 kilos, according to data from DCA Market IntelligenceIt is therefore not surprising that such high amounts are paid for spot milk.
Concerns are growing
For weeks now, there have been concerns in the dairy market about the advancing bluetongue virus. And the concerns are not diminishing. There are increasing signals that milk processors have much less supply than they expected. forecasts have taken into account. Companies that are usually active as sellers are now eagerly looking for volume to meet their delivery obligations. Supply can also be found, because the current prices sometimes motivate processors to convert volumes into cash on the spot market.
Ceiling in market
It is difficult to estimate where the ceiling lies on the dairy market. Demand from the fresh segment will probably weaken in the coming weeks, as temperatures drop. At the same time, milk supply will continue to decline seasonally for the time being, while Christmas demand is slowly but surely coming around the corner again. In addition, it remains difficult to estimate to what extent the bluetongue virus will affect milk production in Europe. In any case, it is clear that there are major concerns about the availability of milk.