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Dairy market: Has the summer storm driven out the bears? Market analysis from July 17, 2024

Dairy Market Analysis from 19-7-24; Milchmarkt Marktanalyse vom 19-7-24

Skimmed milk powder and feed costs falling, cheese falling slightly, protein concentrates stable, milk fat rising.

Dairy Market Analysis from 19-7-24; Milchmarkt Marktanalyse vom 19-7-24

Review and current situation

  • Milk fat: After prices were negative last week, they have stabilized and are now slowly rising.
  • Protein (especially skimmed milk powder): Prices remain on the decline. European skimmed milk powder is currently the cheapest internationally.
  • GDT index: Up slightly by 0.4%, mainly due to rising fat prices, while skimmed milk powder continues to fall.

Situation in Switzerland

  • Butter stocks: Butter stocks in Switzerland continue to grow and reach a record level of 8,000 tons.
  • Demand for AOP cheese: Reduced due to overproduction and relief sales, resulting in dumping prices.
  • Milk price: The nationwide increase of 5% was implemented. Whether this will also be successful for exports remains questionable, as cheese is mainly exported. Results will not be visible until the fall.
  • Exchange rate: Despite low inflation in the USA, the Swiss franc has gained in strength.

Has the summer storm driven out the bears?

  • Fundamental data: Point to stable to slightly higher prices.
  • Demand for skimmed milk powder: Subdued, leading to a shortage of milk fat and rising prices.
  • Cheese prices: Stable, but as skimmed milk powder yields remain low, the trend remains negative.

Conclusion: The price erosion for skimmed milk powder is expected to continue, while milk fat prices are rising.

Forecast for Q3 and Q4

  • Price development in Q3: Remains stable.
  • European milk availability: Now, milk appears to be in short supply in Europe. We therefore expect prices to rise slightly in the fourth quarter. Depending on the duration of the summer and the Christmas business, there could even be shortages and sharply rising prices.

We will be present at the following trade fairs:

  • Sial, Paris, 19–23 October 2024, with our own stand
  • Marca, Bologna, 15–16 January 2025
  • Winter Fancy Food, Las Vegas, 19–21 January 2025, with our partner World's Best Cheese
  • Sirha, Lyon, 23–27 January 2025
  • Tutto Food, Milan, 5–8 May 2025
  • PLMA, Amsterdam, 20 & 21 May 2025
  • International Cheese Awards 2025
  • Summer Fancy Food, New York, 29 June – 1 July 2024, with our partner World's Best Cheese
  • Le Mondial du Fromage et Produits Laitiers, Tours (France), 14–16 September 2025

Best Wishes, Affineur Walo

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