Cheese bounces up briefly, butter slides further down

In terms of dairy sales, the weeks leading up to December are particularly busy, if not the busiest of the year. The foil cheese market is particularly benefiting from this. After a dip, foil cheese prices according to DCA Market Intelligence have risen above the €3.000 per tonne mark for the first time this week. Existing stocks are being absorbed by the current peak demand, but this is a temporary phenomenon.

Lots of milk means lots of cheese
It remains to be seen what will happen next. It is quite likely that the foil cheese market will once again have to swim against the tide, given the high milk supply figures. In the Netherlands, the supply in October at the highest level(!) ever. About half of that sometimes hits the market like cheese within a few weeks. Furthermore, the holidays this year are logistically extremely unfavorable. That can hardly go well in the market, in the sense of a consistent undertone. 

No Christmas revival for butter
Unlike cheese, the increased demand for butter can't mask the market surplus. There's still a lot of frozen butter on the market, which producers and trading houses are eager to sell. Confidence in higher prices is lacking. In fact, the steadily falling prices are motivating people to dump. The price of DCA butter has been falling for almost 20 consecutive weeks and has dropped to €4.785 per tonne, its lowest level since the autumn of 2023. The lower end of the market is still several hundred euros lower. The weak butter market is also depressing the cream market, resulting in falling prices. Moreover, the supply of liquid dairy products is too large for demand, now that milk supplies in northwestern Europe have skyrocketed.  

Milk powder slightly more positive
The milk powder market is performing slightly better. Despite the strong euro, Europe is more competitive on the global market, creating some demand. At the same time, there's still ample supply of milk powder, with some fairly old product in storage. The DCA price has moved slightly further away from €2.100 per tonne this week. This allows skimmed milk concentrate, which is advantageous for drying, to also gain ground. This price rose by €165 per tonne this week, making it the largest increase within the range of dairy prices. Meanwhile, spot milk prices are relatively stable, just above €30 per 100 kilos.

This means significant losses for processors needing to dispose of their surplus milk. Sometimes, a single batch needs to market more than a million kilos of milk in a single week because it lacks its own processing capacity.