Unpredictability and low prices are the order of the day for liquids.

The dairy farmer who is at the mercy of the day market—directly or indirectly—is having a hard time. In the Netherlands, this is hardly, if at all, the case. Usually, there is a processor in between, who currently pays well over four times the spot milk price.

In Germany, however, there are still various 'Versandmilkereien' that can do little else than separate milk into cream and concentrate and have to enter the market with it. They are relatively lucky that German spot prices have been slightly higher than in the Netherlands for almost the entire last year, but not by much.

And to think that it didn't have to turn out this way. While much more is being milked now than last year, there is no question of a record supply. If so much processing capacity had not been cleared in recent years, more milk could have been processed and added to the value more effectively.

This is, however, said with the benefit of hindsight and is therefore relatively easy to say. Few people could have predicted that there would now be such a great demand for drying capacity in particular. Skimmed milk concentrate, whey concentrate, and residual products from whey processing compete for priority processing. As a result, the price of excess liquid product remains low and the price of many milk powders remains high.   

Skimmed milk powder, a product that had been virtually written off in recent years and whose price for a long time barely exceeded €2.000 per ton, is now being sold for prices around €3.000 per ton, and even at such prices, Europe is priced more competitively on the world market than the US and New Zealand. It is noteworthy that the price increase for milk powder has taken place almost entirely in the months since the turn of the year.

Whey powder prices also continue to skyrocket. Here, it is high-quality protein products like WPC80 that are driving the market up (and which seem to be dragging other protein-rich dairy products along to some extent).

Meanwhile, cheese and cream prices are under pressure. Milk fat has actually been struggling all year, and the cheese market has been experiencing ups and downs since the turn of the year. See the cheese index chart for details. Higher whey prices compensate for this, although not all cheesemakers benefit equally from the higher whey prices. Much depends on their ability to add further value to the whey.