Analysis Dairy
Cream and concentrate get yet another boost
It is dangerous to predict that the prices for liquid dairy will not rise further next week. Similar expectations have been expressed in previous weeks as well. However, it seems that the prices for cream and skimmed milk concentrate have been raised once again this week with the last breath.
It is noteworthy that the prices for raw milk in the Netherlands, Belgium, and Germany have not increased this week. They remain stable at a high level with thin trading. Moreover, they are more or less equal to the upper end of the Dutch factory prices for November. Due to the limited volumes being traded, the liquid dairy prices of this week are unlikely to have much influence on the factory prices.
Despite some difficulty, the DCA cream price index increased by over 2% this week, but there is a slight increase in supply compared to demand. As a result, the price was weaker towards the end of the week than at the beginning.
There is still not a lot of trading going on.
Behind the slightly declining cream prices at the end of the week, there is now a clearer downward trend in butter prices. Not yet for fresh product that needs to be used immediately, but for butter that will enter the market in the new year.
The market sentiment for skimmed milk concentrate is different. Here, demand exceeds supply. This is mainly due to good sales to Greece and a strong demand for fresh product. The DCA index therefore rises by over 4%.
It will also help that the milk powder market continues to rise. It is progressing slowly, but the DCA index for skimmed milk powder is over 3% higher this week than last week. It still cannot be said that the market for this product is back in good shape and/or recovered.
Nevertheless, it is encouraging to see movement in the market again. Buyers are becoming active again and there are more export opportunities. Not yet to all destinations, as European product faces tough competition from cheaper milk powder from countries like Belarus, especially in the Algerian market. On the other hand, the stronger dollar exchange rate helps to compete better in the global market.
The prices for regular milk powders remain almost unchanged, while the price for whey concentrate has now come very close to it again. However, this concentrate is not often used to produce regular powder anymore. It is the raw material for expensive whey protein concentrates and isolates.
The dairy market is not doing well this week. Most cheese prices are declining. Cheddar and Mozzarella are experiencing the biggest drops. Gouda foil is facing less price pressure, while the price for natural cheese remains almost the same.
