Good demand for cheese - powder market remains subdued

Milch News, 10/27/2022

  • Milk volume below previous year
  • seasonal course of milk deliveries
  • good demand for cheese
  • low cheese stocks
  • forage supply
  • economic concerns
  • Reluctance to buy powder and block butter
  • lack of international competitiveness
Listing results milk products Germany:
Skimmed milk powder (food grade), €/t
10/26/22 3,400 until 3600
19.10.22 3.500 until 3700
Branded butter (moulded 250 g), €/kg
10/26/22 7.50 until 7.70
19.10.22 7.50 until 7.70
Emmental and square hard cheese (45% fat in dry matter), €/kg
26.10.22 5.50 until 6.70
19.10.22 5.50 until 6.70
Gouda/Edam , block (48%/45%/40% fat in dry matter), €/kg
10/26/22 5.20 until 5.50
19.10.22 5.20 until 5.50

The amount of milk has not changed recently. According to provisional data, the same quantity of milk was delivered in the 41st calendar week as in the 40th calendar week. Between January and October, the dairies had around 0.9 percent less available than in the same period of 2021. The weaker price trend on the concentrate markets continued this week. Cream was less in demand due to falling demand for block butter, skimmed milk concentrate is also under the same influence. The prices for liquid skimmed milk are stable. On the sports markets, the national average went south by 1.6 cents per kilogram. The ife institute reports an average price of 57.3 cents/kg. Form butter can continue to assert itself. The price quotations are stable at a high level and the orders are at a high level. However, pull-forward effects must also be taken into account, since in the coming week in many federal states either the 31.10. and the 1.11. a holiday is celebrated. Consumer prices have recently remained unchanged at EUR 2.29 for a 250-gram packet of branded butter. The block butter market , on the other hand, is more difficult.Buyers continue to be hesitant and cautious. New business comes about, but in terms of volume it is well below expectations for this time of year. Discussions for the first quarter of 2023 rarely result in new contracts. Since the listings for block butter have continued to fall recently, buyers are also speculating that prices will continue to fall. Weaker price tendencies can be seen on the EEX as well as on the southern German butter and cheese exchange. The trading activities on a weekly basis decreased again, but yesterday increased sales could be determined again on the EEX. The prices for butter in Leipzig also fell in the most recent sales. In Kempten, the trading margin for block butter was reduced from 6.70-6.90 euros/kg to 6.55-6.80 euros/kg. Prices for skimmed milk powder also fell significantly. Both at the lower and at the upper end of the trading range, the butter and cheese exchange in Kempten lowered its listing by 100 euros per ton. Demand is still weak, but supply is sufficient. Trading activities on the domestic market are low. Here the buyers are definitely waiting and exercising restraint.There is still little demand for skimmed milk powder on the world market, in particular because China only buys very small quantities compared to previous years. Animal feed qualities in the case of skimmed milk powder are also under pressure and fell significantly further than food qualities. The quotation rose by an average of 240 euros/t to a range of 2,970 to 3,040 euros/t. On the EEX, prices fell as sales volumes fell. Whole milk powder is currently a little less in demand, but can hold its own better than skimmed milk powder in terms of price. The supply of semi-hard cheese is scarce. Ripening stocks are still young and below average. Production is also currently being restricted by maintenance work in many plants. Demand, on the other hand, continues to be extensive. The food retail trade in particular, but also large consumers, call off a large number of goods. Business with third countries continues to be difficult, with European providers lacking overall competitiveness here. The prices were updated unchanged in Kempten and Hanover.Market participants expect the cheese business to continue to be brisk due to the seasonal development of milk volumes and the seasonal increase in cheese demand.

Good demand for cheese - powder market remains subdued
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ZMP Live Expert Opinion

The milk market continues to correct at a relatively high level. The dairy payout prices are still stable and firm. However, the stock market indicates that milk revenues on the farms will soon fall. Butter and powder buyers are increasingly waiting and anticipating significant price reductions.

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