Liquid dairy continues to push market higher

Broadly speaking, the same factors are still responsible for the upward price movement: a lagging supply of milk in general and of milk fat in particular, while there is good demand for this product.

It is not only butter that is in high demand, but also full-fat cheese and yoghurt with extra fat. Bakers also have a great need for butter. Ice cream manufacturers, despite the high prices, also demand a lot of milk fat, but then often in the form of cream.

The same goes for butter that is on its way from New Zealand. That product is much cheaper than European butter – now around €1.000 per ton – but the supply is far too small to really calm the market.

For the dairy farmer, the rising market for liquid dairy is good news. It gives a little extra support to the milk price. However, more is needed in the long term. The markets for milk powder and cheese must also rise.

Last week the cheese market looked reasonably promising. Foil cheese rose in price again. This week the situation has slowed down a bit and the spot price is moving in the other direction. The same is happening with many other types of cheese.

On the other hand, the milk powder market is doing somewhat better, at least when it comes to skimmed milk powder, the largest product on this market. Skimmed milk powder is picking up in price again, but exports are not going well yet. There is still too little demand, and then it does not matter much that Europe is currently the cheapest supplier on the world market. No demand, no sales. The prices for whole milk powder and whey powder are still falling in the meantime.