Milk News, 12.12.2024

At the end of November, the volume of raw materials delivered to dairies rose by 0.8% compared to the previous week. Market participants expect that the trough has now been reached and that delivery volumes will increase slightly again. Compared to the same period last year, dairies had almost 0.9% less raw material at their disposal. The cumulative volume from January to November was 0.4% lower than in the previous year. Prices on the spot markets fell again across all countries. Prices on the spot market have recently been under slight pressure. According to the ife Institute, the average price in Germany in week 49 was 57.3 cents/kg. This is 90 cents lower than the previous week. The southward movement also prevailed in the Netherlands and Italy.

The cheese market remained dynamic in the first half of December. Sales of semi-hard cheese remained strong ahead of the Christmas holidays. The pre-Christmas business in the food retail sector in particular ensured that large quantities of goods were called up. The industry also called off the agreed quantities as planned. The export business was also stable. Demand from Southern Europe and third countries in particular remained at a high level. Meanwhile, the supply of semi-hard cheese is tight, as the high demand in recent weeks has not allowed for any restocking. Due to the low milk deliveries, production was barely able to keep pace and products were delivered in a young state. Accordingly, no easing is expected before Christmas. However, buyers are currently taking a wait-and-see approach and speculating on lower prices at the start of the new year. There were only minor changes in sliced cheese prices. In Hanover, prices remained largely unchanged. The range for block cheese was 4.65 to 4.75 EUR/kg and for bread 4.90 to 5.10 EUR/kg, 5 cents below the previous week's level.

As with cheese, demand for packaged butter is reported to be brisk on the butter market. This is mainly supported by the Christmas business, which has provided additional impetus in recent days. Sales figures have recently continued to rise and demand is expected to increase further, particularly in the last week before the holidays. On the other hand, supply remains limited. Due to the scarce availability of raw materials, manufacturers preferred to produce more lucrative uses than butter where possible. Prices for molded butter on the Kempten Butter and Cheese Exchange remained unchanged at between EUR 8.50 and EUR 8.80/kg. Consumer prices did not change either, but were significantly higher than in the previous year. Consumers usually have to pay EUR 2.39 for a packet of butter. That is 80 cents more than in the same period in 2022. In the block butter sector, however, trading for Christmas production was almost complete and the market showed little movement. Negotiations for the coming year are already underway, but remained unsuccessful due to differing price expectations. Especially as many buyers are hoping for striking prices at the beginning of the new year. The supply of block butter remained tight, but was sufficient for the limited demand. On the EEX, butter prices for the delivery dates December 2024 to August 2025 moved northwards in the 49th calendar week. The average price increased by EUR 26 to EUR 6,883/t, but remained below the current spot market level. The trading volume declined compared to the previous week, falling to 191 contracts (955 tons).

The skimmed milk powder market remained quiet in mid-December. With the Christmas season approaching, market participants have completed their preparations. Manufacturers are concentrating on existing contracts and are not feeling any pressure to sell due to low stock levels. Buyers are also acting cautiously and are well supplied until the end of the year, meaning that there were hardly any short-term deliveries. However, there is still demand for the first quarter of the new year and new business has been concluded, both on the domestic market and internationally. Despite the competitive European product, which is favored by high world market prices and a weak euro, buyers were hesitant, which led to a slight decline in prices. A similar picture emerged for skimmed milk powder in animal feed quality as well as whey and whole milk powder. Prices trended slightly weaker to stable. There was only limited trading activity.