- Stable market for Skimmed Milk Powder, despite challenges with organic milk production and a case of avian flu.
- The cheese sector remains stable, although there are uncertainties about Cheddar cheese prices.
- The decline in organic milk production in France is prompting the government to increase support for organic farming, and the detection of a case of bird flu in Texas underscores the need to ensure food safety and public health.
Hello Partners!
Welcome back to our Newsletter!
We see important trends in the current panorama of the dairy market, including the stability of cheese prices and the increasing interest in investing in skimmed milk powder. This situation reflects the optimism of the dairy industry, despite challenges such as the decline in organic milk production in France and the discovery of a case of avian influenza in Texas. These developments underline the dynamics of a sector that needs to balance production with food safety and public health, and point to the complexity of the challenges and opportunities facing the dairy industry.
Let’s take a look at what else is happening in the dairy market!
Hottest products of the week
Skimmed Milk Powder
The market for Skimmed Milk Powder (SMP), which is destined for animal feed, is holding steady with bids between 2150 and 2200 EUR/MT, indicating a quiet start to April and the prospect of price increases. In addition, there is considerable interest in long-term investment in the product, as evidenced by contracts with prices of up to 2600 EUR/MT. This reflects the market’s optimism about the future value of SMP.
New volumes of Skimmed Milk Powder (SMP) are coming into the market and prices are between 2250 and 2350 EUR/MT. These prices seem to be stable, as recent transactions show. Trading FCMP with sales volumes 20-30 thousand tons has been covered by NZ/Oceania.
Cheese
The cheese sector is stable and there are no signs of a future price decline. Market data indicate that Gouda prices for April were set at 3825 EUR/MT with a slight increase to 3880 EUR/MT in the third quarter. The outlook for Cheddar does not look as optimistic. Prices are approaching the levels quoted for Gouda, which could indicate shifts in market preferences or availability. Meanwhile, the market for Mozzarella remains fairly stable with solid demand.
Fats
Germany’s new retail butter prices for April remain in line with March’s, placing them at 5900-6000 EUR/MT. Spot prices showed an increase to 5700-5850 EUR/MT FCA. Higher demand is expected in the upcoming April-May period due to the upcoming asparagus season, followed by the strawberry season. It is known that the changing and hopefully increasingly sunny weather will lead to increased demand for butter.
Liquids
The price of Cream initially dipped to 6300 EUR/MT before quickly adjusting to a range of 6850-7000 EUR/MT. This adjustment aligns with the dynamics of the retail butter market.
Information obtained indicates a slight price recovery for Skimmed Milk Concentrate. On the German market, prices range between 1600-1650 EUR/MT FCA, while the figures in the Netherlands are slightly lower at 1500-1550 EUR/MT DAP. It is worth noting that the Dutch deals probably closed earlier last week, suggesting different regional dynamics at play.
Seasonally, we expect higher milk income, however in France in particular, there has been a decline in milk production, possibly heralding a shift in production trends. The reason for this may be bad, rainy weather and increased soil moisture.
Whey powders
Food SWP is showing a slight downward trend, with prices fluctuating between 780-850 EUR/MT. In contrast, the spot market for feed whey SWP is oscillating around 630 EUR/MT, with slight fluctuations signaling stability. Forecasts for April are in line with current prices, while price expectations for May and June suggest an increase to 660 EUR/MT. Further strengthening of the trend is forecast for the third quarter, with prices up to EUR 690/MT.
The market for Sweet Whey Concentrate exhibits a dual character. The current spot transactions are burdened by a price pressure of 200 EUR/MT, while the regular bids tend to stabilize and fluctuate around 400-450 EUR/MT FCA.
What else?
In France, organic milk production fell for the first time in 2023 compared to the previous year, reaching 1.23 billion liters, a decrease of 4.5%. Despite the decline, the share of organic milk in total cow’s milk production remained at 5.4%. The French statistics office Insee and the farmers’ association FNPL are concerned about the decline in consumption and the fact that 5% of organic milk producers gave up production or left the sector last year. In response to the farmers’ protests, the French government has increased support for organic farming by a further 50 million euros, bringing the total amount to 90 million euros.
In Texas, a case of avian influenza infection was reported in a person who worked on a dairy farm and had direct contact with cattle. The case was confirmed by the US Centers for Disease Control and Prevention (CDC). The infected person, whose symptom was eye inflammation, is undergoing treatment and has been instructed to isolate himself. According to the Texas Department of State Health Services and the CDC, the risk to the general public remains low. This is the first case of H5N1 avian influenza in a person associated with the dairy industry and the second case in the United States. They emphasized that there is no risk to the commercial milk supply because milk from sick cows is either discarded or properly processed, and pasteurization kills avian influenza viruses.
