DCA benchmarks: Liquid commentary week 16

The liquid dairy market remains under pressure due to continued high milk supply in Northwestern Europe. Processors with surplus volumes sometimes have to sell at very low prices.The DCA benchmark for skimmed milk concentrate is falling sharply this week, ranging from €500 to €860 per tonne. On paper, the product is attractive for drying into skimmed milk powder, and there is some buying interest. However, supply is clearly exceeding demand. Several processors offered large volumes this week, while there was limited capacity to absorb them.Price pressure is also visible in liquid whey concentrate, although to a lesser extent. The benchmark drops by €145 to €865 per tonne. Here too, supply is higher than demand. This is despite rising whey powder prices, supported by good demand in Europe and export markets. Drying capacity in Northwestern Europe is fully utilised, leaving no room for additional low-priced volumes.Spot market prices for raw milk are more stable. There is limited downside, as prices are already at low levels from a historical perspective. The DCA benchmark for Dutch raw milk decreases by €1 to €11 per 100 kg this week. In Germany, the decline is more moderate. Buying interest is limited. Occasionally, Eastern European buyers show interest, but only if prices are low enough to justify long-distance transport. The same applies to skimmed milk. When transport distances are unfavourable, prices are just above €0, but they can increase slightly when logistics are easier to arrange. Milk supply in Northwestern Europe is expected to move towards a seasonal peak in the coming weeks. In France, supply has already started to decline, but this is not yet the case in the Netherlands, Germany and Belgium, according to market sources. Milk fat and protein content is decreasing, but overall volumes remain high.