Milch News, 10/26/2023

Milk deliveries in Germany continue to fall and are approaching their seasonal low. Compared to the previous week, around 0.2% less raw milk was served in the 41st calendar week, but there is an advantage of 0.3% for this week compared to the previous year. In the first 41 calendar weeks, around 2 percent more milk was delivered than in the same period last year. Due to the declining milk deliveries, the supply of industrial cream and skimmed milk concentrate is also decreasing. Demand for cream in particular is very dynamic and prices tend to be marginally higher. Around 5 cents more were achieved on the spot market compared to the previous week; the federal average for spot market milk was 42.6 cents/kg. Similar trends are also reported in Italy, whereas Dutch spot market prices have fallen. Form butter is also showing off its lively presence this week. Overall, the manufacturers are satisfied with the orders. Retailers are already ordering higher quantities in anticipation of the Christmas business, and more butter is still being traded than at this time last year. The prices remain stable at the increased level.For talks about new contracts in November, the dairies are entering the negotiations with increased demands due to the higher industrial cream prices. Block butter, on the other hand, is traded more quietly. Discussions and new contracts mostly relate to deliveries in the new year. Short-term needs are met from stocks; production itself has recently been restricted due to high cream prices. The price in Kempten increased yesterday and the EEX also showed firmer butter prices on a weekly basis. As of the delivery month of November, the settlement prices were above the current spot market level. The cheese submarket remains unchanged. Orders for semi-hard cheese remain at a high level, while orders for mozzarella have declined slightly. Due to the holidays next week, there are slightly higher orders from the retail sector. Industry and gastronomy demand is at normal seasonal levels. The maturation warehouses remain young and below average.Due to the declining milk volume, production continues to decline, but demand remains high, so there is unlikely to be any change in the age and structure of the stocks for the time being. The quotation in Hanover for block goods increased again by 5 cents to 3.70-3.90 euros/t, bread goods prices remained unchanged. This week, manufacturers are again receiving increasing requests for food-grade skimmed milk powder . This was reflected in firmer prices for short-term delivery dates. The quotation in Kempten was increased very significantly at the lower end by 120 euros and at the upper end by 90 euros/t and is now at 2,630-2,700 euros/t. There is also increasing demand from local manufacturers from export destinations, inventories were further reduced and production was ramped up again somewhat. Business in China continues to be disappointing. The EEX has also recently shown firmer price trends. The settlement prices on EEX for the delivery dates from December 2023 are currently above the current spot market level. Animal feed products are also in greater demand again.Prices also rose here and manufacturers of calf rearing feed increased their stockpiling in anticipation of rising prices. In terms of volume, whole milk powder is trading at the previous week's level; slightly firmer price trends can be seen here. In international comparison, domestic whole milk powder is still far from truly competitive. Interest in whey powder has also increased, but at the same time availability continues to decrease. It is often more attractive for dairies to process whey concentrate than to direct the goods into the drying towers. As with skimmed milk powder, manufacturers of calf rearing feed and milk replacers are increasingly stocking up on feed qualities. While the prices for food grades remained unchanged from the previous week, the prices for animal feed grades increased. Recently, no significant contracts for whey powder have been traded on the EEX.