’I know that I know nothing,’ Socrates once said in his great wisdom. Or he did not, yet he is associated by many with this quote. In any case, these are also the words currently uttered by many observers of the dairy market when answering the question of what to expect in the second half of the year.
Although we have already passed the peak of milk production in Europe, the supply of the raw material itself and of dairy products remains high. At the same time, we are seeing an increase in prices and some movement in the dairy market. This is particularly evident in Cheese and Butter. For selected products such as Mozzarella and Cagliata, buyers are only beginning to accept higher prices after a longer period of time.
If we were to sum up the current situation in two words, they would probably be 'movement’ and 'uncertainty.’ These seem to be two entirely different things, but that’s the way it is with the dairy market. As always, more details on everything that matters can be found below.
Continue reading to learn about this week’s market insights.
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Butter
Recently, the illusion of higher Butter prices has become a reality, as Q1 2024 has been covered by buyers and therefore the selling price has reached 4.90 EUR/KG EXW. This has put a bit of pressure on buyers, signaling a trend of continuity in the fat sector following the Q4 2023 patch. This was not the only focus last week, as the valorization of the Anhydrous Milk Fat sector also reached an unexpected value of 6 on the front in some European regions.
Skimmed Milk Powder
Those who were satisfied with the selling price of Skimmed Milk Powder in their contracts under the Algerian government just 3 weeks ago are now talking about the price being undervalued and are looking for cheap raw material in the market to fulfill the contract in line with today’s product prices. In some regions of Europe, the price reaches 2.70 EUR/KG, while the other regions are not far from it. Growth sentiment does not seem to be deteriorating in the foreseeable future, but buyers are still reluctant to accept the reality of the current market trend.
Gouda/Edam
Last week we mentioned that Gouda and Edam are not in the market spotlight. However, this week we see them at the top of the cast. Especially with the hot trend in Cagliata and Mozzarella that sellers have been hoping for and lobbying to build. Given the upswing in the cheese sector, the question is whether retail pricing will pick up on this trend. We hope not. And many customers do as well.
Whey Protein Concentrate
The stocks that were built up were contracted at low, nice prices, so the producers began to increase the price gradually, which was acceptable to some. As a result, the price gradually built up and eventually increased quite significantly. On the other hand, the question arises whether customers are still as eager to buy at the current prices of over 5 EUR/ KG as they were at 4.5 EUR/KG. It should also be remembered that the biggest players have already signed the contracts until the end of the year, and the amount they will buy is insignificant and should not affect market prices at all.
Cream
Overall, it has been another week when both Cream and Skimmed Milk Concentrate have risen across Europe. We are past the peak of milk production and there is not as much raw material on the market as everyone expected. There is more demand for fresh products, so Cream is up.
