Analysis milk
Dairy market rebounds after higher GDT and cold in US
The dairy market is experiencing a remarkable recovery this week, a recovery that occurred mainly after the last GDT auction. There were already earlier signs of an improvement in global dairy prices, including a positive Gulfood trade fair in Dubai and persistent cold weather in the US, resulting in reduced milk supply. The GDT, with its high price spikes, was apparently the last signal the market was waiting for. In Europe, prices for a range of commodities are now also rising.
Read this article?
Become a subscriber and get instant access
Choose the subscription that suits you
The most notable price increase is for skimmed milk powder. The GDT price rose by more than 10%, while this week's DCA price shows an increase of 8,2%. This makes the European product still the most competitive on the global market. Exports are therefore doing well.
A little doubt is not strange
The price of cream also continues to rise, up 11,7% this week, although based on the absolute figures (+€400), it appears that cream is making the biggest gains this week. Butter is following slightly behind, with an increase of €215, or 5,6%. This, however, is the overall trend for the week.
If the last two days are taken into account, it's a different story. It seems like another real butter bonanza has broken out. Here too, the coming days will show whether this can be sustained. Given the reports of overflowing warehouses and very moderate butter prices, some doubt doesn't seem out of place.
{{dataviewSnapshot(46_1770305126)}}
Raw milk undervalued
The product clearly lagging behind the widespread price recovery is raw milk. Spot milk remains remarkably low-priced in Northwest Europe, even undervalued. Calculated per ingredient, it could easily fetch a quarter to a third more. The bottleneck, however, is the capacity to separate the milk into cream and concentrate. The situation is therefore no different for [the Netherlands].
It's unfortunate for those who have to dispose of large quantities of spot milk, as there's a significant loss of value. However, this is more than offset by the recovery in the rest of the dairy market, as the valuation of various commodities is starting to approach the paid (basic) milk price again.
{{dcamiSnapshot(110_1770302958)}}
Finally, the cheese market is also participating in the upward trend, but only marginally so far. Most prices are rising, but by a few percent on average. Fortunately for cheesemakers, the whey market also remains very strong. This is partly reflected in the prices for whey concentrate and more significantly in the prices for higher-grade whey ingredients.