DCA Benchmarks: Milkfat commentary week 21

While butter prices are broadly stable, cream prices continue to move higher. However, cream is still not at a level where it becomes unattractive for butter producers to buy in additional volumes.DCA benchmarks for butter are trading just below the €4,000 per tonne level, showing a slight upward trend this week. Regional price differences remain limited. Market sentiment suggests that, after significant downward corrections in recent months, butter prices may have found a floor. At the same time, upside potential appears limited. Some market participants expect further downside rather than a clear recovery.Stocks remain ample, or even more than that. In addition, Irish processors are increasingly active on the European mainland market. With milk supply there currently around its seasonal peak, more product is coming onto the market. Offers are typically heard between €3,700 and €3,800 per tonne.CreamMeanwhile, the cream market is recovering from a recent dip. The DCA benchmark for Northwest Europe increases by €200 this week to €4,185 per tonne. The rise is driven by an expected decline in supply, as European milk production is likely to decrease seasonally in the coming weeks. This is supporting prices across the liquid dairy market. Demand for cream is solid. Butter producers are actively buying volumes and running at full capacity. The fresh segment is also showing increasing demand. With temperatures rising across Europe, this demand is expected to strengthen further.