Analysis milk

Spotmilk and cream boost liquid marketprices

Spotmilk has suddenly risen by more than 4% in price this week and sells now slightly above the average factory prices. This happened under the influence of a decreasing supply in both the Netherlands and Germany. Large volumes are not involved. Cream and butter also increased in price, but proportionally less than spotmilk did.

Skim milk concentrate, meanwhile, is slightly decreasing in the DCA benchmark. This product remains in good demand, but there is a larger supply available. It is often a byproduct of cream production, which is running at full capacity.

Cream became more expensive again this week and is now almost €8.150 per ton. This makes it too expensive to make butter, but that's okay because there is a high demand for fresh cream.

Byproduct can be cheaper
Byproduct skim milk concentrate may yield slightly less, but with a benchmarkt of €2.145 per ton, it is much too expensive to make skim milk powder. However, this is not a problem either, as a lot of it goes to the fresh market, both in the Netherlands and surrounding areas as well as in Southern Europe. Countries like Italy and Greece demand a lot of dairy products, and if there were enough trucks available, even more would go there. Logistics, however, are a problem.

From the perspective of the dairy farmer, the market for liquid dairy looks good.

More milk could be used if it were up to them, but this is not happening in the middle of summer. Companies are not running at full capacity, and many traders are on vacation. However, it is fortunate that demand is not completely dropping, as has sometimes been the case in previous summers.  

Role of Cheese Taken Over
In the past year, cheese has often supported the basic dairy market, but due to the sharply increased prices of cream, and to a lesser extent butter, the valorization of the package of cream and skim milk concentrate is currently better than that of the package of cheese and whey. A point of attention, however, is the rapidly rising prices for whey concentrate. For a long time, whey played a minor role in dairy valorization because the product was priced so low.

Its price has risen sharply in recent weeks, due to a combination of factors: slightly less cheese production, more available powder towers, and a strong demand for high-quality whey powders.
According to some, it is almost becoming interesting again to make cheese because of the whey. It is not there yet, but whey is definitely a product to keep an eye on. The regular 'feed whey' still shows little movement in price. This market is under pressure from large stocks of older product.

There is still little happening in the milk powder market. Especially in the short term. There is, however, a bit more hope for higher prices in the coming autumn. The expectation is that there will be even lower milk supply by then, and the situation of supply pressure will have disappeared by that time.