Tight milk supply slows further price declines

Raw milk is becoming more expensive for the third week in a row. Early October, the spot milk price dipped to around €55 per 100 kilos, now the spot milk price is well above €60 per 100 kilos, with peaks of up to €63.

The Netherlands is not an island of high prices. The highest raw (spot) milk prices are currently paid in France. The gross value of raw milk is also still above €60 per 100 kilos, with cheese as the most profitable option.

The foil cheese price is moving slightly upwards again this week, while the price of whey concentrate has exploded in recent weeks. The reason is the strong demand for the 'higher' WPCs and WPIs (high-quality whey derivatives).

The price of cream also remains high and shows no signs of weakening. That would also be strange in view of the upcoming Christmas period. Many food companies are now busy making products for that period and are therefore still buying.

The demand for cream is so good that this is also slowing down the fall in the price of butter and bending it upwards. Whether and how long this movement will last remains to be seen, but the downward price pressure of the last few weeks has stopped for a while. There is also still relatively cheap Irish butter on the market, because the Irish dairy farming industry has had a good autumn and dairy farmers can therefore continue to milk well, but the prices of this regularly frozen product are also rising again.

A real turnaround in the market is perhaps only to be expected when the trough in milk supply in the Netherlands and surrounding countries has passed and sufficient new milk cows come into production again. It is also striking that the butter price in Germany, during the time that the price fell here, was hardly under pressure. According to many sources, the lowest product prices mainly come from the trade. Producers often feel less need to lower the price.