Spot milk price not as low in 10 years as it is now

Last week we wrote about an approaching MYOCARDIAL The liquid dairy market is facing the holidays. These words may be a bit harsh, but they're certainly not an exaggeration. The market is facing difficult times. Due to the loss of processing days and the ample milk supply in Northwest Europe, processors are finding themselves in a bind. This is especially true because organizing logistics around the holidays is a major challenge. Drivers often return to their home countries to finish out the year, and that loss is felt.

Low spot milk prices
As a result, liquid dairy products are being traded at rock-bottom prices. The DCA (regional market price) for raw milk in the Netherlands has plummeted this week by as much as €11 to €14,50 per 100 kilos. In Northern Germany, the price is even lower, and in Southern Germany, it's slightly higher. The last time such low prices were seen on the boards was in the last week of 2015. At that time, the price was €13, which was also the lowest level ever. A new low is expected next week. Suppliers report that spot milk is even being traded for less than €10 in the week between Christmas and New Year's. Despite the sharp drop in prices paid in recent months, the price gap is enormous.

For processors with surpluses, the last few weeks of the year are certainly not the best, although the low prices are expected to rebound somewhat in the new year. The price of skimmed milk dropped to €4,50 per 100 kilos. The input also reveals that trade was done for an almost symbolic amount of €1. 

Cream disappears under butter
The milk fat market is persistently weak, with butter prices falling to €4.000 per tonne this week. Cream, like other liquid products, is experiencing logistical difficulties and is falling below the price of butter this week, a rare occurrence. The butter surplus is so substantial that German hard discounters have launched a fierce butter war in the run-up to Christmas. They are selling packaged butter at extremely low prices to attract customers. The lowest price so far is €0,75 for a 250-gram pack of butter. Converted back to B2B level, this would mean butter would have been purchased for around €2.400 per tonne, with an additional €600 allocated to packaging and distribution costs. That doesn't seem a realistic scenario. The market is hoping that the price promotions will help revive the market somewhat. 

Cheese stable factor
The cheese market is currently the stable factor in the dairy market. Gouda foil cheese prices are even rising slightly this week due to tight supplies. This offers prospects for a stable market in 2026, at the very least, although demand often falls short.