The dairy market again shows few negatives this week. However, the spot market for raw milk doesn't align. Prices are going down there. Yet, this is not seen as an indication of a declining dairy market as a whole.
A decreasing spot milk price can be a precursor to a turning point, but for now, it seems to be just a signal that the tension in this small segment of the dairy market is decreasing. Spot milk prices remain high (above €60.00) in both the Netherlands and neighboring countries, and dairy companies would like to process more milk.
In addition, liquid semi-finished products such as cream and skimmed milk concentrate are not participating. They, along with the major commodities, are doing the real work for a higher milk price. Skimmed milk concentrate even saw the highest price increase this week, mainly due to strong export demand from Greece. It is also almost as expensive as skimmed milk powder, which is often made from it.
Cream became slightly more expensive again after a dip last week, but this does not lead to major changes. Meanwhile, butter continues its upward trend. The steps this product is taking may no longer seem spectacular, but every week a new record is set, with no end in sight for the upward trend.
The likelihood of a significant increase in production seems low as milk supply is still decreasing in Europe's largest dairy countries and product from further away is not available.
Butter clearly remains the driver of the price rally in the dairy market, but cheese prices are also rising. Gouda foil cheese has not yet surpassed the barrier of €5,000 per ton, but it is not far off. Cheese manufacturers are producing at full capacity, but they really need to continue doing so, as many buyers have not yet fulfilled their needs.
Almost all segments of the dairy market are performing well, but the weak milk powder market is a bit of a spoiler. In recent weeks, it seemed that this product would also start to perform better. During that period, the price also increased by about 10%, but now the market is stagnating again, as exports are not going well either.
Therefore, milk powder remains a bit of a weak spot in the dairy market and continues to contribute less to the dairy farmer's income.
© DCA Market Intelligence. Op deze marktinformatie berust auteursrecht. Het is niet toegestaan de inhoud te vermenigvuldigen, distribueren, verspreiden of tegen vergoeding beschikbaar te stellen aan derden, in welke vorm dan ook, zonder de uitdrukkelijke, schriftelijke, toestemming van DCA Market Intelligence.
