Dairy Market: Turning Point? Market Analysis from 27 September 2024

Milk fat, skimmed milk powder, and spot milk price slightly declining, protein concentrate (casein) stable, cheese slightly increasing – Swiss cheese remains problematic!

Image

Review and Current Situation

After a rapid rise in recent weeks, the market has taken a breather. The main reason for this is customer restraint due to uncertainties in ordering. This hesitation is further amplified as some manufacturers are already offering lower prices for December and January.

However, the upcoming holiday season is expected to be robust. It is likely that the current caution will suddenly switch to increased demand, which could further drive up prices. Depending on how empty the warehouses are, these price increases could extend into the spring. Our recommendation is, therefore, to cover 30% to 50% of the demand now at the current interesting prices for December and January.

Situation in Switzerland

Following speculation about a potential 0.5% interest rate cut, the Swiss National Bank's (SNB) interest rate decision on 26 September 2024 was eagerly awaited. The SNB decided on a moderate cut of just 0.25% to 1%. This led to an immediate strengthening of the Swiss Franc. We expect these trends – moderate interest rate cuts and a strong Franc – to continue. An exchange rate below 0.90 next year would not be surprising and could result in us experiencing deflation rather than inflation again.

With raw milk cheeses, we currently observe very tight stocks of mature products, which could lead to shortages for the holiday season, and only regular customers will receive sufficient cheese.

Turning Point?

The pressure may have eased, but we are convinced: Prices will continue to rise. This calm before the storm could be deceptive.

Forecast for Q4 2024 and Q1 2025

Q4 2024:

- Increasing milk fat prices.

- Moderate increases in protein prices.

Q1 2025:

- High prices due to limited production increases and empty stock levels.

- No price reductions expected before March 2025.

Best regards, Affineur WaloWe 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