DCA benchmarks: Liquid commentary week 8

Rising liquid dairy prices have turned into price declines again, according to the DCA benchmarks for week 8. With the exception of skimmed whey concentrate, all benchmarks are moving lower. This development is closely linked to the high milk supply in Northwest Europe.In the first half of the year, spot prices for liquid dairy products often come under pressure as the seasonal production peak in May approaches. However, this year the pressure is relatively strong. The Dutch raw milk benchmark declines by €5 this week to €15 per 100 kilo and is the cheapest again. The gap with farmgate milk prices, which are above €35 per kilo, therefore remains wide.Processors report that factories are running at full capacity, making it difficult to place surplus volumes on the market. This also applies to German milk. Skimmed milk concentrate is also moving sharply lower, dropping by €345 to €1,050 per tonne. In theory, this price level could be attractive for milk powder producers, but processing capacity is currently fully utilised. The pressure on Skimmed Whey Concentrate is not that big. The first milk collection figures for January show that production levels in several Northwest European countries remain high. Compared to a year earlier, output is up by around 5% in Germany, France and the Netherlands. This explains the renewed price pressure in the liquid market.