Loss of Polish milk fat gives market 'reality check'

The direct reason for the changes seems to be the disappearance from the market of cheap Polish and Baltic cream and butter.

The supply is no longer there and the prices there have risen to the Western European level. There is also no replacement cheap butter supply available from Ireland, for example. Only in the United States is reasonably cheap milk fat still available, but before this can appear on the European market, several hurdles still have to be overcome.

This clearly raises the question of where there is still room for improvement in the dairy market. Are there or will there soon be many additional volumes of milk on the market, or is there no major expansion of supply for the time being?

Many market analysts rely on patterns from previous years when answering this question and think that sooner or later the dairy supply will improve and that the prices of butter, cheese and other products will then fall. It remains a possibility, especially if the weather changes quickly. However, there are also various indications that things may be different this year. The supply curves for milk deliveries in the Netherlands, Germany and France do not predict much good so far. This is not only due to the weather or the temperature. There are also the after-effects of bluetongue and there are also fewer and fewer farmers.

In concrete terms, the current situation means that anyone who wants extra milk, cream or concentrate will have to pay extra for it. A little extra demand quickly drives up the price, even for skimmed milk concentrate and spot milk.

The same goes for buyers of cheese and butter. There are not many stocks, except perhaps of milk powders.

The price of skimmed milk powder has remained relatively low for a long time. Also because there is relatively little export. Last week there was another export tender for delivery to Algeria. European parties reportedly sold around 30.000 tons of skimmed milk powder and 15.000 tons of whole powder, but that also does not really cause any ripples in the market. 

It is a matter of waiting for the moment that too few stocks are replenished due to low powder production and that the market will finally be clean, as it also seems to be happening on the market for regular whey powders. Cheese producers are at least still lucky that the whey is now being sold at high prices to the ingredients industry. It can hardly keep up with its products for expensive protein drinks and special products for seniors, athletes and children.