DCA Benchmarks: Milkfat commentary week 25

Milk fat prices have declined for a fourth consecutive week. The DCA butter benchmark has fallen to its lowest level since early 2021, as ample inventories and strong milk flows continue to weigh on the market.The butter market remains predictably weak. Stocks are high and are expected to remain elevated for some time. Product that is more than a year old is still being offered in the market, indicating that inventory overhangs have yet to be cleared. A meaningful recovery in consumption is unlikely in the near term. Butter demand typically peaks during the winter season rather than in the summer months.The DCA Northwest Europe butter benchmark declined by €55 to €3,675 per tonne. Such low price levels have not been seen in recent years. Just one year ago, butter was trading well above €7,000 per tonne.CreamThe DCA cream benchmark also remains under pressure, falling by €40 to €3,700 per tonne. As a result, the price spread between cream and butter remains very narrow. There are, however, indications that the cream market has strengthened slightly in recent days. Significantly warmer temperatures across Europe are supporting demand from the fresh dairy segment. At the same time, cream availability remains abundant despite the gradual seasonal decline in milk production.AMFThe AMF (Anhydrous Milk Fat) market is also weaker. The DCA benchmark fell by €85 to €4,500 per tonne. Trading activity remains subdued, with buyers maintaining a cautious wait-and-see approach.