Spot milk prices rise in weaker market

In a few weeks, milk production will reach its seasonal low. It is therefore not surprising that trading volumes on the liquid dairy market are somewhat low. Many processors have little or no surplus. At the same time, there is no demand for products such as cream and concentrate, simply because it is not profitable to calculate with the fixed end products in the form of butter and skimmed milk powder.

For the third week in a row, the cream price is slowly moving down, by €20 to €9.705 per tonne. This means that the market deviates slightly from the seasonal pattern, because historically, the price increase lasts a bit longer. However, it should not be forgotten that the cream price recently broke a record, as did the butter price. The fat market is coming from an extremely high level and will remain there from a historical perspective in the coming months.

Correction for spot milk
Therefore it is not surprising that the spot milk price of DCA is moving upwards again, after the corrections in recent weeks. The quotation for the Dutch market is rising this week by €1,50 to €58 per 100 kilos. Reasoned from the raw material value of the milk that is listed above €60 in many valorisation schemes, as shown by data from DCA Market Intelligence, it is logical that buyers want to pay these prices. It is less logical to explain it in terms of season. Nevertheless, there is little interest from factories to sell, despite the fact that the spot milk prices are moving above the payout prices.

Stable concentrate price
Despite the weak milk powder market, the price of skimmed milk concentrate remains relatively easy to manage at €2.325 per tonne. The market is relying on a tight supply. When milk production starts to increase again, there will probably be price pressure. At this time of year, demand from the fresh segment is somewhat weaker. In addition, skimmed milk concentrate is far too expensive to be profitable to powder.