Analysis milk
Falling liquid supply boosts dairy market
Prices on the dairy market have risen across a broad spectrum this week. Most of the movement is in the liquid segment, but cheeses are also participating, while the powder market is largely stable.
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Although many eyes are focused on milk fat, it is skimmed milk concentrate that has seen the biggest price increases this week. Compared to last week, the DCA price is now almost 12% higher. This is due to a decreasing supply, especially from countries that have brought a lot of cheap product onto the market in recent weeks, such as Ireland, the United Kingdom and France.
The supply peak is behind us there and with it the pressure from these countries on the liquid market as a whole in Northwestern Europe. In Germany there is still some extra product available locally due to some minor disruptions, but for the coming period concerns about the drought and its effects on the milk supply are starting to dominate. This was also noticeable at the private label fair held this week in Amsterdam.
Although relatively less than for concentrate, prices for cream and butter have also increased considerably this week. The cream quotation of DCA is almost 4% higher this week than last week and is therefore more in balance with the butter quotation – which has also increased slightly. The butter market seems to be improving further for the period after the summer. The fact that there are few stocks and limited production capacity reinforce this impression. Here and there, considerably higher prices have already been agreed.
The butter price is not currently at a record high, but it is at the highest point for this time of year since 2020.
The milk powder market shows largely the same picture as in previous weeks and therefore does not move much. However, there is a consensus that the skimmed milk powder market is not under further pressure and may even be slightly better. However, this is again mainly evident on the feed side.
At first glance, the whey market does not seem very volatile, but the market for higher whey powders remains stable and provides good margins.
The cheese market is generally somewhat better. The quotations for Gouda and Edam foil cheese are increasing. Mozzarella is doing even better, both in terms of value and price increase. This is partly due to the fact that demand for mozzarella is now also increasing. Cheddar is somewhat weaker, but there is also a larger supply of it seasonally.