Dairy market is benefiting from a more positive wind

They're in good company, as it wasn't just the cream connoisseurs who had to absorb the positive news (or disappointing news, depending on their position). Many others in the dairy world also struggled this week, but went with the flow.

The milk and whey powder market, for example, was also dominated by positives. These were just a few percent increases, and trading didn't seem to be brisk, but there was still a positive wind blowing through the market.

It could be related to a major trade fair in the Gulf region that's yielding good contracts, or it could be related to an upcoming restocking needed by several infant formula manufacturers affected by contamination from a defective ingredient. Speculation abounds, but few seem to know the details. The fact is that prices are rising somewhat, almost across the board. On the other hand, there are also concerns about a stronger euro against the dollar, which could hamper exports.

The cheese market is seeing the biggest downsides. Cheddar, Emmental, and even natural cheese are struggling, with prices under pressure. The cheddar market is suffering from high production, particularly in Eastern Europe, where this cheese (and its whey) remains a better alternative to powdered milk, butter, or cream.

Meanwhile, the prices for Gouda and Edam foil cheeses, as well as mozzarella, are rising slightly. It should be noted, however, that there is still a fairly wide price spread for foil cheeses.

It's also often noted that a lot of cheese is being made primarily because there's a need for more whey. While this is certainly true, the average cheese price is still rising.

Meanwhile, what's happening on the whey market is partly reflected in the price trends for liquid whey concentrate (the price has remained consistently high in recent weeks) and "flat" whey powders. Here too, the price trend is slightly positive.

However, the stronger developments are taking place in the higher and narrower segments of WPCs and WPIs. The price of WPC80 has risen sharply in recent weeks from around €11.000 to €12.000 per tonne to €13.000 to €14.500 per tonne.

Returning to the liquid market, it should be noted that not only is cream trading significantly higher this week, but skimmed milk concentrate is also still slightly more expensive. While an 8,7% increase pales in comparison to last week's 85% increase, it still represents a clear increase.

In the wake of cream, butter and butteroil prices are also rising slightly. The spot market for raw milk remains relatively calm despite all the movements. In percentage terms, some changes may be substantial, but an adjustment like last week's for skim milk concentrate is not yet on the horizon.  

Meanwhile, most price developments are rising, but are not yet sufficient to cover the milk price that the dairy farmer receives.