DCA benchmarks: Liquids commentary week 13

Liquid dairy prices are trading at historically low levels for this time of year, and this situation is expected to persist for now. With the exception of skimmed milk concentrate, DCA benchmarks in this category are declining again.The DCA benchmark for raw milk in the Netherlands has decreased by €0.50 to €13 per 100 kg. Benchmarks in Northern and Southern Germany have fallen more sharply, by €2 and €1 respectively, to €13.50 and €15.50 per 100 kg. High milk supply volumes in Northwest Europe continue to weigh on the market, while the loss of processing days around Easter is also putting additional pressure on prices.Despite the low price levels, buying interest remains limited. This is largely because processing capacity at dairy plants is already fully utilised. Historically, the spot milk market tends to strengthen after the seasonal peak in milk production. However, there are differing views in the market on when this peak will be reached, although it is typically around week 21. Notably, the DCA benchmarks for skimmed milk concentrate and whey concentrate are both at €815 per tonne. In other periods, skimmed milk concentrate has traded at double this level or even higher. While unusual, this is not unprecedented, as whey concentrate briefly traded above skimmed milk concentrate around the turn of the year. Whey concentrate is experiencing less downward pressure due to relatively strong whey powder prices and tighter availability.