Analysis milk
Liquid dairy market pauses
The liquid dairy market is taking a break this week. Prices for raw milk are largely stable, while on average slightly less is paid for liquid semi-finished products.
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That this is happening is not entirely surprising. Prices have been rising with increasing difficulty in recent weeks and the dip in milk supply seems to be almost over, especially in the Netherlands. In addition, the fat and protein contents in milk are rising sharply.
Large volumes are not traded on the spot market in the meantime. Although some prices are stabilizing, they are doing so at a high level. This is for the supply side. On the demand side, the high prices are a barrier. Processors who do not have to buy milk or other products do not do so. With a purchase price of 60 cents or more for a kilo of milk, there is not much left to earn something with.
The sales of cream and concentrate are still going reasonably well. Skimmed milk concentrate is still just as expensive as the skimmed milk powder that is often made from it. So that is not profitable. Better sales for the concentrate are in export to Greece. There is still good demand from there.
Prices for cream and butter are falling a fraction as the market seeks further direction. Butter remains scarce, but a German butter price of roughly €8.500 per 1.000 kilos caused disbelief on Wednesday.
The skimmed milk powder price is dropping again this week, but on the other hand, the cheese price continues to rise. Manufacturers are producing at full capacity.
This also results in the prices for liquid whey continuing to fall. Whey concentrate yields between 40 and 50 cents per kilo, almost half less than the peak price a good month ago.