Dairy market slowly climbs out of end-of-year trough

This is partly due to the fact that trading has been relatively slow to pick up again this year. The number of transactions is still relatively low, and parties are reacting cautiously. They are first waiting to see how things develop. The liquid dairy market has been quite poor in recent weeks, and there is still a relatively generous supply of milk. While the spot milk price has risen by roughly 200% compared to the previous price may sound impressive, it's not something that significantly changes the market. Spot milk, which fetches between €10,00 and €11,50 per 100 kilos, remains a product that drags down the market, albeit less sharply than it did in the past.

The same can be said for skimmed milk concentrate and cream. Prices are recovering, but still far too little for healthy market conditions.

Things are expected to change further, according to reports. The protein market seems to be showing some stability at the moment. Skimmed milk powder is currently exporting well, even if, from the dairy farmer's perspective, it's at a price that's far too low.

This price, which is slightly above €2.050 per ton, still makes it attractive for various parties to produce powder from skimmed milk concentrate. As a result, the price of concentrate is expected to rise further, and the market floor will gradually rise again (although this isn't helping dairy farmers for the time being).

Demand for cheese also seems to be holding up well at the moment, with the notable fact that foil cheese is quite young, often barely three to four weeks old. This doesn't indicate any stockpiling. Here too, there seem to be good conditions for prices to slowly rise again. According to several producers, milk supply is also gradually decreasing, although this isn't the case for everyone. Meanwhile, the natural cheese market isn't exactly doing well.

So there are signs that prices are picking up again, but the outlook isn't equally clear or positive everywhere. The milk fat market, which soared to such highs last year, remains complex. Cream prices recovered well this week, but butter prices only moved up hesitantly.

Parts of the butter and butter oil (AMF) market are still being affected by cheap American supplies, although the pressure seems to have eased somewhat at the moment. This product is not suitable for the consumer market due to its different composition and quality, but for large industrial processors it is an attractive alternative to the more expensive European product. This indirectly impacts the regular European butter market.

Much still needs to be done, however. Trading is slowly picking up, and many players are still exploring the prospects and opportunities.