Germany: High volume of milk is raw material markets under pressure

Milch Cockpit, 09.05.2014

  • High demand for milk and dairy products by a growing world population and increasing purchasing power and Westernization of consumption habits in the emerging markets.
  • Milk delivery in the northern hemisphere is the seasonal turning point.
  • Significant increases in milk production in almost all major exporting countries.
  • Competitiveness of EU goods to the world market through the existing difference in price and in addition the fixed euro limited.
  • Ukraine conflict carries risks for the milk market.

(AMI) In commodity markets, the prices following sustained extensive milk delivery are strongly under pressure. Due to the lower demand on the part of the industry after the holidays, as well as in addition weather conditions less polling in the fresh food area raw milk and concentrates on offer has increased noticeably last on the spot market. Due to the almost completely busy processing capacity, simultaneously only very limited additional quantities of processors can be recorded, although this is extremely lucrative at current price levels for the raw material in relation to the price of the product.
It was at the beginning of the month to further price reductions at industry cream and skim milk concentrate. The spot price for raw milk and skim milk dropped significantly. Overall the decreases were less pronounced than on the side of the protein on the fat side.
Longtime compared the prices of the current week at industry cream as low as last in the first quarter were 2013. Skim milk concentrate most recently determined the lowest level since early 2010.

Germany: High volume of milk is raw material markets under pressure
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In consequence of the high volume of milk processing capacity in all product areas are almost completely exhausted. This is currently have little scope to restrict the production, except by selling milk to the sports market, what supply side significantly impacted the commodities market manufacturing companies. An easing of the situation is only expected if the milk seasonally go back to producers again divert the quantities of milk between the production processes.

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