Better protein price gives dairy market a friendlier face

The dairy market shows a clearly friendlier face this week than in previous weeks. The increases dominate. The main cause is that especially the protein-rich products are somewhat better demanded. Meanwhile, the fat remains weakly priced. The prices of cream and butter decreased, as did the price of whole milk powder. Despite the fact that more prices are in the positive than remain stable or in the negative, it remains difficult to speak of a market recovery. The increases remain limited to a maximum of about 3%, with the exception of skimmed milk concentrate. Its price rose by 6.2%. That is the largest increase of this week. The amount of concentrate that comes onto the market is decreasing, due to a declining milk supply and because factories have just gone through a months-long period of maintenance and repairs. This naturally has consequences for the concentrate price. There is a higher demand for the product. Still, a portion of the excess concentrate goes to Greece, but there is also still ample concentrate being converted into skimmed milk powder. The yield on this decreases slightly, but is still good enough. Moreover, the export of inexpensive skimmed milk powder to destinations outside the EU is picking up more pace. Unlike the concentrate price, the cream price moves downwards this week. The DCA quote is 1% lower, but the lower end of the market has dropped significantly more, particularly in the second half of the week. Alongside the cream price, the butter price also decreased, and then a bit harder than the price of cream. The DCA quote is 1.6% lower this week. For Northwestern Europe, the quote now stands at €4,900 per tonne, but the spread in the quoted prices is very large: from €4,550 for Irish winter butter to €5,400 for German butter sold in 10-kilo blocks. There seems to be little indication of an upcoming Christmas demand in this market. The milk and whey powder market shows a mixed picture again this week. The quotation for skimmed milk powder is a few percent higher than last week, but the quotation for whole milk powder is slightly lower, mainly influenced by the weak milk fat. The whey powder market is stable to slightly rising, but this only reflects part of what is happening in the whey segment. The quotation for whey concentrate shot up by nearly 50%, mainly influenced by the increasing demand for higher whey powders, especially WPC80. This product generates about €12,000 per tonne and is currently in extra demand due to a new product that Starbucks has launched in the US: coffee with a cream topping made from whey protein. The cheese market also shows some positive signs for the first time in a long while. Whether this is caused by a Christmas demand is not entirely clear, but the DCA quotation for foil cheese is about 3% higher than last week, and mozzarella also shows a small increase. For cheddar and other cheese varieties, this has not yet been achieved. The market for raw milk is finally almost stable. The pressure on the market seems to be decreasing somewhat, but with prices of €31 to €32 per 100 kilos, the spot market is still operating well below the price that dairy farmers receive, and the price is also below the raw material value.