Cheese briefly recovers, butter continues to slide

The dairy market shows multiple faces in mid-November. The film cheese market is showing its better side now that demand is at peak level. Butter should also receive support from the Christmas sales, but little can be observed in practice with continuously declining prices. In terms of dairy sales, the weeks leading up to December are especially busy, if not the busiest on the annual calendar. Particularly, the film cheese market is currently benefiting from this. After a dive, the film cheese prices from DCA Market Intelligence have this week for the first time risen above the threshold of €3,000 per tonne. The existing stocks are being consumed by the current peak demand, but this is a temporary phenomenon. Many milk means many cheese After that, it must become clear how it will proceed. It is quite likely that the film cheese market will again have to row against the tide, given the high milk supply figures. In the Netherlands, the supply in October was at the highest level ever(!). About half of that can sometimes enter the market as cheese within just a few weeks. Furthermore, the holidays this year are, logistically, extremely unfavorable. It is hard to see how this can turn out well in the market, in terms of a stable undertone. No Christmas revival for butter In contrast to cheese, the extra demand for butter cannot camouflage the surpluses in the market. There is still a lot of frozen butter available, which producers and trading houses are eager to get rid of. After all, there is no confidence in higher prices. On the contrary, the continuously declining prices motivate dumping. The butter price from DCA has now been falling for almost 20 weeks in a row and has dropped to €4,785 per tonne, the lowest level since autumn 2023. The bottom of the market lies several hundred euros lower. The weak butter market also pressures the cream market with declining prices as a result. Additionally, the supply of liquid dairy is too ample for the demand, as milk supply in Northwest Europe has surged. Milk powder slightly more positive The milk powder market is performing slightly better. Europe is, despite the strong euro, more competitive in the world market, which creates some demand. At the same time, the supply of milk powder is still ample, with quite dated products in storage as well. The DCA quotation has this week taken a bit more distance from €2,100 per tonne. As a result, skim milk concentrate, which is favorable for drying, can also take a step. This price rises this week by €165 per tonne, making it the largest gainer within the range of dairy quotations. Meanwhile, spot milk prices are moving fairly steadily, slightly above €30 per 100 kilos. This means a significant loss for processors who need to get rid of their surpluses. Sometimes a batch must put more than a million kilos of milk on the market within a week because there is no own processing capacity for it.