Milk News, 27.02.2025

Although milk production continued its seasonal increase, it was much slower than usual. As a result, the gap to the previous year's level is widening further. The ZMB reports that local producers delivered around 0.4% more milk in the seventh calendar week than in the previous week. Overall, however, the total volume was still 3.0% below the previous year's level. Prices on the spot market were again weaker. In Kiel, the Ife Institute quoted a price of 46.8 cents/kg - a fall of 1.6 cents on the previous week. Sliced cheese continues to be popular and in high demand on the German market. Food retailers recorded high sales figures and demand from the food service sector also continued to rise. The industry called up contract quantities quickly, in some cases even ahead of schedule. Exports were also stable, both within the EU and to third countries, despite individual import restrictions due to foot-and-mouth disease. On the supply side, stocks remained tight, as the slow increase in milk deliveries continues to limit cheese production. It is hardly possible to build up stocks, and short-term requests could not always be met. Many producers had already planned their capacities for the coming month via contracts and were unable to participate in the spot market. Due to the shortage of raw materials, higher prices were implemented, but there were still uncertainties for the second quarter, which is why contract negotiations did not always lead to deals. As with cheese, food retailers enjoyed brisk demand for packaged butter. According to national sales statistics, order volumes were up on both the previous week and the previous year. In addition to molded butter, there was also increased demand for mixed spreads. One possible reason for the increase could be the lower store prices at the beginning of the month. At the same time, many private consumers are stockpiling goods in order to avoid possible price increases before the Easter business. In addition to molded butter, there was also increased demand for fat spreads. In some cases, producers were not always able to cope with the high demand and, in particular, requests at short notice were not always met. The price structure remained stable and negotiations for the new contract term from March are currently underway. In the food retail sector, the price for 250 g of German brand butter remained constant at EUR 2.19, which is 50 cents higher than the previous year's price. The market for block butter also picked up slightly at the end of February, with the European industry primarily favoring short-term deliveries. There was disagreement over prices for later delivery dates, meaning that only a few deals were concluded. Producers' willingness to sell was limited due to uncertain price trends and a slow increase in milk volumes. Prices remained largely stable, with a slight increase. On the EEX in Leipzig, prices for delivery dates up to October 2025 were firmer, with an average increase to EUR 6,997/t (EUR +24 compared to the previous week). The trading volume increased to 940 tons (188 contracts), up 230 tons on the previous week. Towards the end of February, the market for food-grade skimmed milk powder was largely calm, while prices remained unchanged. Although some orders were received by manufacturers, these were mainly limited to short-term deliveries. However, buyers were reluctant to enter into longer-term contracts. A recent tender in North Africa brought in new orders for several European suppliers, particularly from Eastern Europe. There was also buying interest from the Far East, but European producers were in competition with US suppliers who had recently lowered their prices. While foot-and-mouth disease hardly plays a role anymore, logistical challenges continue to pose a hurdle for exports to third countries. The "Gulfood" trade fair in Dubai has so far had little noticeable impact on the market, possibly due to the approaching Ramadan - a time when demand in Arab countries traditionally decreases. There was a decline in trading activity on the European Energy Exchange (EEX): The volume fell to 1,515 tons (303 contracts), a drop of 505 tons compared to the previous week. The price trend for delivery dates up to October 2025 showed a slight weakening, with an average price of EUR 2,658/t (EUR -13 compared to the previous week). While prices for March to October were above the current level, the February delivery date remained within the existing range.