Dairy market: Have the bears been driven out for good? Market analysis from 26 July 2024
Cheese falling slightly, protein concentrates and skimmed milk powder stable, milk fat, feed costs and spot milk rising.
Review and current situation
- Milk fat: The upward trend continues.
- Protein: Prices have stabilised.
- Cheese market: The market has calmed down. In recent weeks, Gouda has been under pressure, which has led to slight price reductions. However, a price increase of €0.20 is being requested for the fourth quarter.
- Other cheeses: mozzarella, cagliata and Emmental are stable and priced above Gouda. After the summer, however, the price premium for mozzarella is expected to fall, which will put pressure on the price of cagliata.
Situation in Switzerland
- Exchange rate: The Swiss franc has gained in strength. As the interest rate differential between the US, Europe and Switzerland will narrow from next year, a stronger franc is expected in 2025.
- Export prices: Export prices will have to be increased for the fourth quarter, which will be a challenge given the current already high price levels.
Have the bears been driven out for good?
- Fat market: The fundamental data point to stable to slightly rising prices for milk fat. The market appears to be increasingly signalling a short supply of milk fat, while proteins are weakening.
- Cheese production: In Europe, cheese production will be reduced from September, while consumption of semi-hard cheese will increase. The markets are currently in balance, but shortages could occur from September. This is particularly true if milk fat prices continue to rise and the production of skimmed milk powder or protein concentrates becomes attractive or necessary.
Conclusion:
If milk fat prices continue to rise and demand for cheese remains good, prices could rise significantly by +20% - +30%.
Forecast for Q3 and Q4
- Price trend in Q3: Slight price increases, especially for, fat, mozzarella, cheddar and Emmental.
- European milk availability: Milk availability in Europe currently appears to be becoming tighter due to rising fat prices. We expect prices to rise in the fourth quarter. It remains to be seen whether this only affects milk fat or also proteins.
We will be present at the following trade fairs:
- Sial, Paris, 19–23 October 2024, stand 7 B 002
- 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
