Better protein price gives market a more friendly face

Despite the fact that more prices are rising than remaining stable or falling, it remains difficult to speak of a market recovery. The gains remain limited to a maximum of about 3 percent, with the exception of skim milk concentrate, which saw a 6,2% increase. This is the largest increase this week.  

The amount of concentrate entering the market is declining, due to a decline in milk supply and because factories have undergone months of maintenance and repairs. This naturally affects the concentrate price. The product is being demanded more.

Some of the surplus concentrate still goes to Greece, but much of the concentrate is also still being converted into skimmed milk powder. The yield on this is declining slightly, but is still good enough. Moreover, the export of inexpensive skimmed milk powder to destinations outside the EU is increasing.

Unlike concentrate prices, cream prices are moving lower this week. The DCA price is down 1%, but the lower end of the market has fallen considerably more, particularly in the second half of the week. Butter prices also fell alongside the cream price, though slightly more sharply than the price of cream. The DCA price is down 1,6% this week. For Northwest Europe, the price is currently €4.900 per tonne, but the spread in quoted prices is very wide: from €4.550 for Irish winter butter to €5.400 for German butter sold in 10-kilo blocks. This market doesn't seem to be experiencing much of a Christmas demand.

The milk and whey powder market is showing a mixed picture again this week. The price for skim milk powder is a few percent higher than last week, but the price for whole milk powder is slightly lower, mainly due to the weak milk fat content.

The whey powder market is stable to slightly increasing, but this only reflects part of what is happening in the whey segment.

The price of whey concentrate shot up by almost 50%, driven primarily by increased demand for higher-grade whey powders, particularly WPC80. This product fetches approximately €12.000 per ton and is currently experiencing increased demand due to a new product Starbucks has launched in the US: coffee with a whey protein topping.

The cheese market is showing some positive signs for the first time in a long time. Whether this is due to Christmas demand is unclear, but the DCA price for foil cheese is up about 3% compared to last week, and mozzarella is also showing a small increase. Cheddar and other cheeses haven't seen this yet.

Finally, the raw milk market is virtually stable. Market pressure appears to be easing slightly, but with prices ranging from €31 to €32 per 100 kilos, the spot market remains well below the price dairy farmers receive, and the price is also below the value of the raw material.