- Skimmed Milk Powder prices are steadily rising and expected to increase further in the coming quarters.
- The cheese market shows mixed signals, with strong demand for Mozzarella and stable prices for Cheddar and Emmental.
- Butter prices have significantly increased in Germany, influenced by retail adjustments.
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Welcome back to our Newsletter!
With the start of summer, the milk market is characterized by dynamic changes. Prices for Skimmed Milk Powder are rising steadily, the cheese market is showing mixed signals and there have been significant price adjustments for fats. In this issue, we also report on the USDA’s extended support for dairy farmers affected by the H5N1 outbreak and the significant improvement in the free trade agreement between China and Peru. As we head into the holidays, let’s take a look at these updates and see how the market performs!
Let’s take a look at what else is happening in the dairy market!
Skimmed Milk Powder
Skimmed Milk Powder (SMP) for feed has maintained a steady spot price around 2300 EUR/MT. Expectations for the third quarter suggest a slight rise to 2400 EUR/MT, with a further increase to 2500 EUR/MT anticipated for the fourth quarter. For SMP used in food, recent international tenders have resulted in sales around 2450 EUR/MT, aligning well with current market rates.
Cheese
The cheese market shows mixed signals. Gouda spot prices have decreased to 3850 EUR/MT, though availability remains high. Conversely, demand for Mozzarella continues to be strong, and prices for Cheddar and Emmental cheese remain stable and firm, indicating a resilient market for these varieties.
Fats
The price for Butter in Germany, notably influenced by retail adjustments, has seen a rise to 6800-6900 EUR/MT, up from 6400-6500. This increase, occurring just before the holiday months, could potentially dampen demand during a typically high-consumption period. New discounter deal for packed Butter was closed for July 2024 above 6800 EUR/MT.
Liquids
Cream prices have experienced a mild uptick, now ranging between 7950 and 8100 EUR/MT. Improved weather conditions have stimulated demand, supporting the price increase in this sector.
The demand for Skimmed Milk Concentrate remains strong, pushing prices to between 1900 and 2000 EUR/MT, FCA. This uptrend highlights a robust demand in this market segment.
Milk spot prices have shown a significant increase due to heightened buying activity from Southern Europe. Despite overall milk intake being higher than the previous year, a forecasted drop in intake due to upcoming weather conditions could sustain higher price levels.
Whey powders
The price for Sweet Whey Powder (SWP) used in feed, delivered DAP, is currently around 690-700 EUR/MT for the third quarter. Looking ahead to the fourth quarter, the initial asking price jumps to 800 EUR/MT. However, projections suggest that prices will retreat back to 700 EUR/MT by the end of Q4, continuing a trend observed in recent months.
What else?
The US Department of Agriculture (USDA) has expanded its Emergency Assistance for Livestock, Honey Bees, and Farm-raised Fish Program (ELAP) to support dairy producers affected by the H5N1 avian influenza outbreak. This update will now compensate dairy farmers for financial losses due to reduced milk production when cattle are removed from milking operations following a confirmed H5N1 case. Agriculture Secretary Tom Vilsack emphasized USDA’s commitment to aiding producers’ economic stability amid the outbreak. The virus has been detected in 12 states, including Colorado and Texas, prompting the USDA to urge dairy producers to adhere to biosecurity guidelines. Eligibility for ELAP assistance requires a confirmed positive test and the removal of lactating cows from production within a specified timeframe.
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China and Peru have reached a substantial conclusion in upgrading their 2009 free trade agreement, aiming to boost cooperation in minerals, energy, manufacturing, and agriculture. In a Beijing meeting, Presidents Xi Jinping and Dina Boluarte signed agreements to enhance trade, including Peruvian grape exports and the creation of a Peruvian-Chinese Business Council. China, a major investor in Peru and top market for its copper, is vital to Peru’s development plans. Boluarte invited Xi to inaugurate the Chancay megaport in November, during the Asia-Pacific Economic Cooperation (APEC) summit in Peru.
