DCA Benchmarks: Milk powder market commentary week 35

For the ninth consecutive week, the skimmed milk powder market has moved to higher levels. Prices have not been this high since the summer of 2022. Tight stocks appear to be the main driver, although the rally reflects a combination of factors.The DCA benchmark for skimmed milk powder in Northwest Europe rises by EUR €30 this week to EUR €3,105 per tonne, extending the steady upward trend. Market participants point to tight stocks, despite substantial volumes of milk having been processed into powder in recent months amid ample milk supply.No difference between EU and VSExports outside Europe have been strong, absorbing significant volumes. This was partly because Europe remained competitive on the global market for an extended period compared with other suppliers. That picture has now changed considerably, as prices in the United States have declined sharply. Expressed in US dollars, the price gap has now almost disappeared. It therefore remains to be seen whether there is room for European prices to continue moving higher.Gap feed and food is narrowing In the whey powder market, the price gap between feed and food grades is narrowing a bit. The DCA benchmark for food-grade whey powder in Northwest Europe falls by EUR €20 this week to EUR €1,830 per tonne, although this remains exceptionally high by historical standards. The benchmark for feed-grade whey powder rises by EUR €60 to EUR €1,645 per tonne, bringing it close to the record level reached earlier this year. The whole milk powder market remains quiet, with broadly stable prices. The DCA benchmark edges down by EUR €10 this week to EUR €3,660 per tonne.