European dairy market: cream prices rise, SMP and cheese prices strengthen [314th Edition of the Foodcom DAIRY Newsletter]

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In the 314th issue of the Foodcom DAIRY newsletter, we take a look at the situation on the European dairy market in mid-August. Reduced milk availability is becoming increasingly noticeable in several segments. WMP, SMP, and cheese prices have risen, and the biggest changes are currently visible in the cream and spot milk markets.

Butter prices have also risen slightly, though available stocks continue to limit the scope for more significant price increases. In the protein segment, the situation is more varied. The growth rate of WPC80 has slowed due to changes in buyers’ formulations, while WPI availability remains limited, and MPC85 is benefiting from strong demand.

In the coming weeks, milk availability will be one of the most important factors. If it remains limited, some products may receive additional price support before Q4.

Milk Powder

Whole milk powder (WMP) is offered in the range of 3,400–3,550 EUR/MT. Skim milk powder (SMP) for food use is priced at 2,850–3,000 EUR/MT, while feed-grade SMP is priced at 2,850–2,900 EUR/MT for current deliveries and for Q3.

WMP has strengthened again. Reduced milk availability is supporting prices, which is why the market is stronger today than in previous weeks.

A similar trend is evident for SMP. Reduced milk availability and higher prices for skim milk concentrate are driving up production costs. Purchasing activity has not accelerated significantly, but product availability is lower than it was earlier this summer.

This should continue to support SMP as Q4 approaches. However, the extent of further changes will depend on milk supply and buyer activity in the coming weeks.

Cheese

Gouda is being offered in the range of 3,250–3,300 EUR/MT, and Edam in the range of 3,100–3,200 EUR/MT. The European cheese market has strengthened slightly, mainly due to reduced milk availability.

Mozzarella is priced at 3,500–3,600 EUR/MT and remains at a strong level. Limited milk availability is reducing downward pressure on prices in the second half of Q3.

Cheddar cheese is being offered in the range of 3,300–3,400 EUR/MT. Prices have risen slightly, but available stocks continue to limit the scope for a more significant increase.

Emmental is priced at 3,300–3,400 EUR/MT. Supply is sufficient, but higher prices for milk and other dairy raw materials are helping to maintain current price levels.

As Q4 approaches, reduced milk availability and higher raw material costs may continue to support cheese prices.

Fats

Butter is being offered in the range of 3,900–4,100 EUR/MT. Prices have risen slightly, and significantly more expensive cream is further supporting fresh butter. At the same time, available inventories continue to limit the potential for a stronger rebound.

Purchasing activity is gradually increasing, but there is no shortage of product on the market. Older stocks continue to compete with fresh butter and limit pressure for further price increases.

Future price movements will largely depend on the availability of milk and cream. If milk supply remains limited, fresh butter may receive additional support. An improvement in milk supply, on the other hand, could alleviate some of this pressure.

Liquids

Cream is being offered in the range of 4,800–5,000 EUR/MT on major European markets, and prices are even higher in some regions. This sharp increase is linked to reduced milk availability following a period of high temperatures and dry weather.

Spot prices for raw milk have also risen again and are around 45–50 EUR/100 kg in parts of Europe. This represents a reversal of some of the declines seen in early August and a renewed increase in cost pressure on dairy producers.

Skim milk concentrate (SMC) is being offered in the range of 2,800–2,900 EUR/MT. Higher SMC prices are driving up SMP production costs.

Whey concentrate costs 1,400–1,500 EUR/MT. An increasing proportion of liquid whey is being diverted to the production of higher-value protein products, leaving less raw material available for standard powder production. This helps keep whey concentrate prices strong and raises SWP production costs.

Whey and Proteins

Sweet whey powder (SWP) for food use is priced in the range of 1,750–1,850 EUR/MT, while feed-grade SWP is priced at 1,450–1,550 EUR/MT. High costs of liquid whey and strong demand are supporting prices, and a significant portion of demand for Q3 and Q4 has already been secured.

WPC80 Instant is priced at 25,500–26,000 EUR/MT. Formula changes have curbed some demand and may reduce purchasing needs for Q4. However, global demand remains strong, so the market is more balanced and no clear downward pressure is yet evident.

WPI Instant is offered in the range of 31,500–32,000 EUR/MT. Availability remains limited, although additional production capacity may gradually improve the supply situation later in the year.

MPC85 is priced above 12,800 EUR/MT. Strong demand for milk proteins and limited production capacity continue to support prices.

Whey permeate for food use is offered in the range of 1,000–1,050 EUR/MT. Supply is high, but stable demand allows for the absorption of available volumes. The price differential relative to SWP and lactose further encourages the use of permeate as a substitute wherever possible.

Food-grade lactose costs 1,550–1,650 EUR/MT. Strong demand and gradually declining inventories mean that availability is somewhat lower. Prices are likely to remain at current levels or rise slightly.