DCA Benchmarks: Liquids commentary week 19

Prices across the liquid dairy market are moving higher, according to the DCA Dairy benchmarks. Skimmed milk concentrate showed the strongest increase this week, while raw milk prices also moved up.The benchmark for skimmed milk concentrate increased by €560 to €1,280 per tonne. The sharp rise is not easy to explain with one single factor. Prices have been volatile in recent weeks. On the one hand, demand is supported by attractive margins for drying concentrate into skimmed milk powder, which is also gaining value. On the other hand, the liquid dairy market is still dealing with oversupply.This week’s price increase is mainly linked to stronger demand from Eastern Europe, especially Poland. Demand from the fresh segment in countries such as Greece is also improving as the tourist season starts to build.The benchmark for liquid whey concentrate increased by €90 to €900 per tonne. Strong demand for whey proteins is supporting the market here as well. At the same time, supply of liquid whey remains higher than the available processing capacity.Better balance expectedThe liquid dairy market is expected to move into better balance in the coming weeks. Milk supply in Northwest Europe is likely to decline seasonally soon, although the first half of May will still be affected by broken production weeks due to Ascension Day and Pentecost holidays. Raw milk benchmarks also increased this week, although gains were relatively modest. German milk benchmarks showed the strongest increase, rising by €3.50. The North German benchmark moved to €14.50 per 100 kilos, while South Germany increased to €16 per 100 kilos. The Dutch raw milk benchmark increased by €0.50 to €10.50 per 100 kilos, marking the first increase since week 12.