Analysis Dairy
Only cheese continues to trend higher on dairy market
The rally in the dairy market has come to an end. After a strong recovery in recent weeks, the upward potential is now clearly exhausted. Only cheese prices are still rising this week, but that is actually more of a lagging effect. Although the future is uncertain, the market looks fairly solid due to tight inventories.
This week, the market is clearly taking a different turn. After a rapid surge to historically high prices, the butter benchmark reported by DCA is decreasing for the first time since early June, from €90 to €8,030 per ton. Cream prices are also stepping back. A signal that the peak has been reached for now, as indicated by weaker world market prices. However, in the volatile butter market, you can never be completely sure. Inventories are consistently tight and the Christmas demand is looming.
Cheddar up, mozzarella down
In the cheese market, prices often continue to rise, except for mozzarella. However, the foil cheese market is no longer rising further, according to insiders. Breaking the psychological barrier of €5,000 per ton proves to be difficult, even for Frau Antje cheeses. Producers do mention that inventories are decreasing further, providing a solid foundation for the market. Cheddar prices still have further upside potential due to strong demand and limited supply from Ireland. On the other hand, mozzarella is slowly declining as the tourist season comes to an end and demand from Southern European destinations decreases.
Milk powder back down
Milk powder has been the weakest link in an otherwise strong dairy market for some time. Nevertheless, skimmed milk powder prices were able to gain ground in recent weeks, but this week the market falls back to just above €2,500 per ton. Abundant inventories and weak global market demand are undermining the market. The raw material for drying powder, in the form of skimmed milk concentrate, is also decreasing: by €104 to €2,445 per ton. However, concentrate is still far from being profitable for making powder.
