DCA Benchmarks: Liquids commentary week 20

With the exception of the raw milk benchmarks in Germany, prices for liquid dairy products are moving higher again this week. In particular, skimmed milk concentrate continues to increase sharply. After a period of extremely ample availability, supply is now slowly tightening.The benchmark for skimmed milk concentrate rises by €410 to €1,690 per tonne. Although the market showed a mixed picture in recent weeks, prices have now reached their highest level of the year so far. This suggests that the bottom of the market is likely behind us. Historically, this often coincides with the peak in milk production.Less oversupply Compared to skimmed milk powder, there is still further upside potential for skimmed milk concentrate. At the same time, supply remains relatively ample across Northwest Europe. The fact that prices are rising despite disrupted processing weeks due to holidays indicates that the oversupply situation is gradually easing.The benchmark for whey concentrate increases more moderately, up €50 to €950 per tonne. Demand for whey concentrate remains strong due to the favourable returns on high-value whey proteins. However, supply is also large, mainly because cheese production remains high during the seasonal peak in milk output across Northwest Europe. Raw milkThe Dutch spot milk benchmark is also recovering from recent lows, rising by €4 to €14.50 per 100 kilos. Oversupply in the market is gradually declining. For the first time since February, Dutch spot milk is again priced above milk available in Northern Germany. In Germany, raw milk benchmarks remain slightly under pressure.