Dairy concentrates still some remaining gainers

The milk powder market remains weak and is not only suffering from competitive supply from New Zealand and the US on the export markets that are so important for this dairy product, but is also suffering from an increasingly weak dollar. In order to export, a double barrier must in fact be broken down.

However, some traders still see some bright spots. For example, Algeria has hardly placed any government orders for milk powders this year, but it is expected that private Algerian parties will soon be allowed to import milk powders. Perhaps that will provide a new opportunity.

For more niche products, such as lactose, the price also seems to be increasing again somewhat.

The demand for skimmed milk concentrate, the raw material for skimmed milk powder, is now high. Here too, no flat or falling prices. The quotation increases by another 3,35% to €2.160 per ton of dry matter. The concentrate is now usually not used to make skimmed milk powder, but for fresh dairy or for export to Southern Europe. There is often a strong import demand for this product at this time of year.

There is also a good demand for whey concentrate. The quotation for this has even increased by 27,5% to €625 per ton, but the price range is quite large and more is offered here and there, depending on the quality of the product. The higher whey products still bring in good prices, but that is not the direct cause of the rising prices for whey concentrate. It is the falling cheese production that is causing the price increase. The prices for regular, 'flat' whey powders are still slightly under pressure.

The fact that cheese production is decreasing slightly is easy to explain. Demand is currently quite weak and customers have covered their needs quite well. This can also be seen from the falling prices. However, there still do not seem to be large stocks, at least not for products such as foil cheese. Cheddar from Ireland and the United Kingdom is still having a relatively difficult time, also because export to destinations outside Europe is difficult, partly due to the weak dollar.

The market is also weak for Gouda and Edam natural cheese, an important product for Dutch cheesemakers. In recent months, it seems that too much of it has been made and now there is too much in storage. This is putting pressure on prices. There are even batches offered for less than €4.800 per ton.  

The milk fat market is also under further pressure. Both the prices for cream and butter are slightly lower than last week. Butter oil also has to take a step back. Price pressure is currently coming from two sides. Cheap cream is being offered from Poland and the Baltic countries, up to €8.400 per tonne. Cheaper butter and partly also cream is being offered from Ireland and the United Kingdom.