Analysis milk
Dairy market shakes loose after stress over animal disease
The dairy market was still clearly under the FMD pressure in the past week, although no new infections have been reported after the first case near Berlin. The trade is slowly trying to get out of the crisis mode that quickly set in and switch to normal business. This is clearly visible in the final quotations: a lot happened, but on balance most quotations did not move much from their place.
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This is, to be clear, the result of sometimes chaotic price movements and logistical actions. Many liquid dairy flows, but also solid products, could not reach their usual destinations in recent times, which caused shortages in one place and surpluses in another, with associated price differences.
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German milk was not contaminated, nor was it stopped within the EU, but many processors outside Germany still did not want German milk for a while, because end customers might object to products with German ingredients.
In the meantime, the situation is normalizing again and cream is even able to book a modest plus on the liquid market, both in the Netherlands and in Germany. In France, the price of cream is even close to €9.000 per tonne. However, cream in the Netherlands and Germany was slightly cheaper towards the end of this week than in the middle of the week, but the new quotation still ends with a plus.
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The butter quotation also shows a small plus. It is difficult to predict how the butter market will develop further. At the moment the market seems quite stable, but milk production will increase in the coming period and as a result the price threatens to come under some pressure. Moreover, there are enough parties in the EU who believe that they have to pay a lot for butter and see that the product from elsewhere is much cheaper. New Zealand butter is still cheaper than the EU product, although the price difference has decreased and American butter is even much cheaper (around €1.800 per ton). Therefore, there are all kinds of products from third countries in the pipeline on their way here: from the US, New Zealand, Australia, Ukraine. With a volume of several tens of thousands of tons, it will not flood the market, but it can depress prices. But it is not there yet.
The cheese market also seems quite stable, but there are still various movements going on underneath. Dutch foil cheese is increasing in price, German product is having a bit more trouble.
This also applies to other types of cheese, but this effect may hardly be visible next week, if everything remains quiet around foot-and-mouth disease.