DCA Benchmarks: Liquids commentary week 21

Liquid dairy product prices are moving higher again this week. In particular, DCA benchmarks for raw milk have made a significant upward move, climbing out of the trough the market had been in for several weeks. Skimmed milk concentrate and whey concentrate are also on the rise.The increase is linked to the fact that the loss of processing days in this period is largely behind us. After Whit Monday, regular production schedules resume. Combined with the seasonal decline in milk supply, this creates room for higher prices. In the Netherlands, milk intake is already declining, as April figures show. In Germany, supply is currently at its peak, although a decline is expected shortly.Raw milkDCA benchmarks for raw milk in the Netherlands increase by €5 this week to €19.50 per 100 kilos. Northern Germany shows a similar rise to €19, while Southern Germany increases by €7 to €22. Since mid-February, prices have consistently remained below the €20 mark. From a historical perspective, a price increase on the spot market at this time of year is explainable, and further upward movement is likely in the coming weeks. That said, supply remains relatively high compared to processing capacity, which is currently being fully utilized by most plants.Skimmed milk concentrateThis also explains why the DCA benchmark for skimmed milk concentrate is rising at a more moderate pace this week, following two sharp increases: up €50 to €1,740 per tonne. This marks the highest level since September last year. Demand from powder producers is strong, as the skimmed milk powder market remains sluggish. However, supply of skimmed milk concentrate is still ample around the seasonal peak in milk production, which tempers further price increases. Whey concentrateThere is also strong demand for whey concentrate, with the DCA benchmark rising by €135 to €1,085 per tonne. This is the highest level in years. For the feed industry, whey concentrate is becoming relatively expensive, prompting some buyers to look for alternative protein sources. For powder producers, however, whey concentrate continues to offer favorable margins relative to the end product.