Cheese performs best in quieter dairy market

Despite a decline, butter and cream are also trading slightly higher this week, as are most milk powders, but they are not as high as cheese. Gouda foil cheese is up 5% in DCA's price range, reaching €3.260 per tonne. Mozzarella and Edam foil cheese follow closely behind.

The price increase began last week, but is really taking hold this week. Gouda foil cheese is already selling for prices up to €3.350 per tonne for the second quarter of this year.

Foil stronger than cheddar and natural
This product thus surpasses cheddar in price, even though that cheese has a higher dry matter content. A significant number of batches of natural cheese are also sold at lower prices.

The DCA cheese index, which represents all cheese listings, increases by 7 points.

Cream and butter prices have fallen sharply this week compared to last week's peak levels, which is somewhat sobering for the market. Nevertheless, prices for both cream and butter are still higher this week than last week. The price drop did not continue, or even reached the bottom of the previous price.

Demand for butter, in particular, is therefore not bad. In Germany, retail demand for butter in 10-kilo packages is particularly strong.

However, there is a feeling in the market that butter and cream prices could still go either way.

Surprising concentrate
Surprises are always possible, as was the case this week with the concentrate price. Last week, it rose sharply, but this week there was an unexpected price drop of 16%. The DCA price dropped below €1.400 per tonne, while a lot of product was sold at considerably lower prices. The cause remains to be seen. While a few factories were under maintenance or experiencing outages, there is still good demand for concentrate for both milk powder production and fresh dairy products.

The DCA price for skimmed milk powder is slightly down this week, but virtually stable, although there was considerable volatility between last week's and this week's measurement points. Moreover, the price is still several hundred euros higher than for much of last year, thanks in part to continued strong exports. Despite a weakening US dollar, Europe remains competitive on the global market. Prices for almost all other milk powders are slightly higher this week.

Milk remains undervalued
Meanwhile, the raw milk market continues to underperform. It still doesn't fetch more than €20 per 100 kilos in the Netherlands. Apparently, no company has the capacity to separate this spot product into concentrate and cream. Even with such a simple process, significantly more value can be created.