Analysis milk
Spot milk price a spoiler in a steadily rising market
The dairy market has few negatives this week. The spot market for raw milk is however giving a different signal. Prices are going down there. However, this is not taken as an announcement of a declining dairy market as a whole.
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A falling spot milk price could be a harbinger of a turnaround, but for now it just seems like a signal that the tension on this small segment of the dairy market is easing somewhat. Spot milk prices remain high (above €60,00) in both the Netherlands and neighboring countries and dairy companies would like to process more milk.
Furthermore, liquid semi-finished products such as cream and skimmed milk concentrate are not included. Together with the major commodities, they do the real work for a higher milk price. Skimmed milk concentrate is even good for the highest price increase this week, mainly due to strong export demand from Greece. It is also almost as expensive as skimmed milk powder, which is often made from it.
Cream became slightly more expensive again after a dip last week, but this did not lead to major changes. Butter, meanwhile, continues its advance. The steps upwards that this product takes may no longer seem spectacular, but every week a new record is broken, with no end in sight for the advance.
It also seems unlikely that much more product will be available soon, as milk supplies are still declining in Europe's largest dairy countries and product from further away is not available.
Butter remains the clear driver of the price rally in dairy, but cheese prices continue to rise. Gouda foil cheese has not yet broken the barrier of €5.000 per ton, but is not far off. Cheese manufacturers are producing at full capacity, but they really have to continue doing so for a while, or so the impression goes, because many buyers have not yet met their needs.
Almost all segments of the dairy market are doing well, but the weak milk powder market is a bit of a spoilsport. In recent weeks it looked like this product would also do better. The price also increased by about 10% in that period, but now the market is stagnating again, because exports are also not going well.
This means that milk powder remains somewhat of a weak spot in the dairy market and also continues to contribute less to the dairy farmer's milk money.