Increasing supply is becoming a bit too much for the dairy market

The downward movement is in contrast to the movement of the payout prices for dairy farmers. These are still rising. The result is that producers currently have to make concessions on the milk price, because the yield of dairy is lower in many cases. The downward movement of the spot milk prices for raw milk indicates this. The so-called Kieler Rohstoffwert index of the Institut für Ernährungswissenschaft also indicates this, although it is only calculated on the basis of a part of the dairy products that the industry produces and the index is mainly tailored to the German dairy market.    

The gap between the payment price for raw milk and the sales price of finished products has been partly reduced by a recent increase in sales prices (including cheese) towards the retail, but according to the industry this was also badly needed. Based on these contracts, other prices can also be adjusted, at least as far as trade within the EU is concerned. For the freely traded products, however, the prices are going down further, although it remains difficult to say that the market is now being flooded with cheap supply due to the increasing flow of spring milk.

Liquid market down
The increased supply is most strongly felt in the market for concentrate and cream. The DCA quotation for skimmed milk concentrate is down 9% this week, mainly due to an extra supply of cheap Irish, British and also French concentrate. This product is eagerly bought up by parties that still have the capacity to make milk powder from it, but not everyone can do that.

Milk powder market is calm
The milk powder market remains under pressure, but it is also almost unchanged light pressure. It is true that export is difficult and there is a lot of competition on the world market. According to various parties, this is why some stock is building up again and there is now more stock in storage than last year at this time.
The market for 'regular' whey powders is also quite calm, but sales of food-grade whey powder are going reasonably well. The relatively small lactose market also continues to do well.

The results in the market for higher whey powders, such as WPC80 and WPI90, remain unchanged. However, the number of producers is limited, while the trade in them is also dominated by a small circle of companies.

Pressure on cheese prices
Cheese prices are taking a further step downwards, but the decrease remains limited to 1% to 1,5% in relative terms. However, producers continue to look at the world in a fairly relaxed manner, because they do not feel much pressure. Some are almost completely sold out, others are close to that point and the average delivery age is still very low.

Of the large products, mozzarella seems to be the cheapest, but its valorisation is still about the best, because its dry matter content is quite low.