Despite a considerable supply of liquid dairy, prices are holding up well this week on the spot market. In the Netherlands, the market feels slightly weaker after a previous week of rising prices, while in Germany the market feels somewhat stronger. Although the market is calm in general, there is no sign of summer weakness in liquid dairy prices.
In the movements on the raw milk market, small differences can be observed. More movement is seen in the semi-finished products. This week, the cream price at DCA is slightly higher than last week, while the price for skimmed milk concentrate is slightly weaker.
This is caused by concentrate being too expensive to powder and therefore dependent on the fresh market for price formation. A significant part of the product goes to destinations such as Greece, which sources indicate is also struggling with the current price level.
The cream price is also largely determined by demand from the fresh market, but there are other factors at play. The butter price itself may be on the low side to justify the current spot price for cream, but the fact that the butter market - despite calm trading - remains firm, provides support for the cream price. Demand from the fresh market does the rest.
The big surprise comes from the liquid whey market. The price of thick whey/whey concentrate has risen rapidly from around €200 per ton to €450 per ton. Two reasons seem to underlie this: lower cheese production in the Netherlands and Germany and strong demand for whey proteins from the high-quality ingredient sector. High prices are being achieved for WPC-80 and higher and for WPIs. They are in high demand for sports and specialty nutrition, and the good sales are promising more.
This development also improves the value picture of cheese and whey compared to the option of cream/butter and milk powder and other choices.
By the way, the spot milk price has recently strengthened and is now circling around the level of the guaranteed price of FrieslandCampina.
The raw material price is also rising, but according to the latest (German) calculations, it is lagging a bit behind.