Dairy market falls with large differences towards Christmas

The effect of the upcoming holidays is becoming increasingly noticeable, especially in liquid dairy products. The price of raw milk is dropping by several cents per kilo.

The price of skimmed milk concentrate has also fallen well below the average of recent months.

The cream price even takes a giant step back, with minus €1.420 per ton, or 16%. In a way, it all fits in with expectations, because the demand for liquid product will drop sharply in the coming weeks due to leave and holidays. Less dairy is processed and transported.

That the butter price is rising again somewhat with all the price decreases may seem surprising, but it is nevertheless explainable. Consumers continue to demand butter. More of it must therefore go to the store. Another factor is that the butter price has already fallen considerably in the previous weeks. With the current movements, a more or less normal distance has now arisen between the cream and butter prices.

Butter price stable or not?
For the period after the holidays, cream and butter prices are expected to stabilize more. Butter prices are expected to remain more or less around the €7.000 per tonne level. That is not entirely certain, the butter market remains unpredictable. That is probably also the reason why there is no more cheap butter coming into the EU from other parts of the world. For example, American butter, which can be on the quay in the EU for €6.300 to €6.400 per tonne. Many consider the risk of such a step to be a bit too great. Suppose that in the meantime the butter price in the EU is falling anyway…

Another notable movement is that of whey concentrate. This product continues to rise in price and is now higher than the price for feed whey powder. The whey concentrate is not intended for this purpose either, but is purchased by producers of high-quality WPCs and WPIs. For cheesemakers, the expensive whey concentrate is an extra welcome addition to the yield of cheese production. The prices for foil cheese and mozzarella have fallen sharply in recent weeks.

The result of all the price decreases in the dairy market over the past few months is that the basis for current milk prices has been eroded further and further. The market developments of the past few weeks may not make things much worse, but they certainly do not help. That is why there is a good chance that with the arrival of the new year, a different wind will blow over the field of factory prices.