Cheese prices on the rise

Prices on the cheese market continued to rise at the beginning of October. This was also necessary in order for producers to keep up with other processing methods, particularly butter and skimmed milk powder, in the competition for the raw material milk. This has now reached the record level of summer 2007. The goal of a level playing field has not yet been achieved. Particularly for longer-term contracts, prices for semi-hard cheese in September were still significantly lower than those achievable in short-term business. Further price increases must be expected, at least for new contracts, and there is also much to suggest this in the short-term business.

Demand is still considered to be strong in relation to supply. In the first half of the year, less cheese was produced in the EU than in the previous year. It was only in July that it was significantly higher than in the previous year, which can also be explained by the increased milk supply. A total of 5.122 million tons of cheese were produced in the EU from January to July, which was just 21,000 tons more than in the same period last year. At 453,000 tons, 31,000 tons more were exported in the same period than in 2012, so it is not surprising that there is talk of stocks being too low. In view of continued good demand from the EU domestic market and export markets, stocks of hard and semi-hard cheese are not expected to normalize to a level that allows sufficient time for maturation before the end of the year. Cheese production is not expected to be restricted over the Christmas and New Year holiday season. It could even be expanded if necessary, as less milk is temporarily sold through fresh processing, which means that more can be processed into cheese.

Therefore, the cyclical increase in milk deliveries that has set in since July and which will be supplemented by seasonal growth from December onwards is unlikely to result in a weakening of the high price level in the other processing sectors for the time being.