Milk News, 06.02.2025

Last week, milk production rose again, which is normal for the season and indicates an end to the short-term interruption. In the fourth calendar week of the year, 1.0% more milk was delivered than in the previous week, reducing the gap to the previous year's figure to 1.5%. This was partly due to the fact that the increase in the same period of the previous year was less pronounced. Overall, however, the volume of milk since the beginning of the year has remained below the previous year's level, which meant that dairies processed around 1.8% less milk in the first four weeks. According to the ife Institute in Kiel, prices on the spot market continued to rise and most recently reached 48.6 cents per kilogram. In the Netherlands and Italy, however, prices fell slightly.

The market for skimmed milk powder was quiet at the beginning of February. Hardly any new contracts were concluded. Exports were sluggish, partly due to the Chinese New Year. While deliveries for the first quarter were secured, there were uncertainties for the second quarter, primarily due to foot and mouth disease (FMD). Overall, the market remained stable despite the uncertainties. There was no clear trend in terms of prices: In Kempten, quotations remained unchanged, while they fell slightly on the EEX. However, trading on the futures market increased significantly. Prices rose internationally, particularly in New Zealand, meaning that European products remained competitive.

On the butter market, the part for molded butter was stable at the beginning of February, although sales figures in food retail were below the usual seasonal level. Demand was particularly high for promotional products, but overall sales figures did not meet manufacturers' expectations. At EUR 2.39, the price of a 250-gram pack remained unchanged from the previous week, but was EUR 0.70 higher than in the previous year. Various brands were offered at prices between EUR 1.99 and EUR 2.49 in promotional campaigns. In contrast, the situation on the market for block butter was mixed at the beginning of the month. Some suppliers recorded high demand, but at the same time many buyers were cautious. New contracts were only concluded to a limited extent, particularly for deliveries in the first and second quarters. Market participants acted cautiously as falling prices for industrial cream, partly due to favorable offers from Eastern Europe, exerted pressure on prices. After a brief price increase at the end of the month, block butter prices fell again. The Kempten quotation was lowered by 15 cents to between EUR 7.25 and 7.40/kg, and the EEX in Leipzig also reported falling prices. The average price for the period from February to October 2025 was EUR 7,112/t, down EUR 182 on the previous week. Despite the falling prices, trading volumes on the butter futures market increased significantly in the last week of January.

At the beginning of February, demand on the German cheese market remained at a high level, affecting both the food retail sector as well as the industry and the GM sector. However, supply remained tight as stocks were low and most stocks were young. Due to the high sales of contracted goods, it was not always possible to meet short-term requests. Manufacturers blame the low supply of raw materials in particular for the tight stocks. Due to the excess demand, manufacturers were not affected by sales pressure and were able to continue to push through the higher price level. However, prices have recently shown a mixed trend and uncertainties regarding the availability of raw materials have made long-term agreements more difficult. Export business has recently been little affected by the FMD outbreak and deliveries to both European and non-European countries have gone smoothly. Cheese deliveries to the USA also increased again.