Analysis milk
Liquid dairy market pauses
After a few wild weeks, the dairy market has had a relatively quiet week. Only cheese and butter showed clear price increases, but the steps up were smaller. Liquid dairy clearly marked time.
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Spot milk prices in the Netherlands and Germany remained virtually stable this week, but at a high level and still 5 to 10 cents above the milk money that farmers receive from the factories.
Large volumes of milk did not change hands. Due to a declining milk supply, most processors are holding on to the milk they receive.
They try to bring that to value themselves. Due to the declining supply, that is often also very necessary, because otherwise the contractual obligations may not be met and fines will follow from retailers, for example. Anyone who really wants milk, cream or concentrate, has to open the wallet and then product will be released.
Raw milk is not the ideal product to transport. Skimmed milk concentrate and cream are better suited for this. And because the price of concentrate has been quite high recently, several companies decided to put some extra volume of it on the market. Selling concentrate was more attractive than making milk powder from it. Skimmed milk powder is actually not expensive enough to have concentrate dried for it, and the price of milk powder is still only going up a little bit.
But by putting a lot of concentrate on the market, the price also drops. The price of cream also drops slightly for the second week in a row. The cause of this is somewhat guesswork. It is possible that the high price is somewhat deterrent,
The price of butter, on the other hand, is becoming somewhat more stable, making butter relatively more profitable than cream. Another striking movement is that butter oil is now clearly above the cream equivalent.