Market-Report 24-3-23, Milk price soon below € 0.40?
Are dairies lowering the price to below 40 cents?
The 6th week with stable prices.
It was another quiet week with very stable prices. Skimmed milk powder fell slightly, but milk fat rose slightly.
This calm situation should not obscure the fact that the Kiel commodity value has fallen from its peak in April 22 from 67.5 cents to 39.0 cents this February. That is a minus of 42.2%.
And in Switzerland?
Exports in February were declining again. 2023 exports were down 10.7% (1234 tonnes). In absolute terms, the biggest losers were gruyere with 373 tonnes (-16.5%) and Switzerland Swiss with 125 tonnes (-21%). The bright spots were once again the small independent semi-hard cheeses, such as Flower meadow cheese with +19 tonnes (+1%) and tete de Moine with +6 tonnes (+2.8%).
Please also read our report on Swiss cheese exports 2010 - 2023 including the February 23 sales. https://www.affineurwalo.ch/en/news/swiss-cheese-winning-model
By the way, for a few cheese lovers we still have some Alpine cheeses from summer 2020 in stock.
Milk prices in Switzerland are still very stable. No price reductions have been announced for April either.
To the question: Will the dairies lower the price to below 40 cents?
No! I don't think so!
As a rule, the Kiel raw material value is the indicator for the future milk price. In this respect, we can expect the pay-out price to drop towards 40 cents in April. This would mean that most dairies would only produce skimmed milk powder at a loss. Cheese production allows a pay-out price of over 40 cents. The price cuts of the last few weeks have not yet fully reached the supermarkets. I expect prices to drop again in the supermarkets towards Easter. As with butter, thanks to the resulting increase in demand, the exchange prices for cheese will rise slightly in April by € 0.05 - 0.10 per kilo.
Hopefully, sales over Easter will be good and prices will hold until June. Depending on the weather, milk will be scarce from July onwards and I would not be surprised if we have a Kieler raw material value of 67 cents again in September.
Kind regards, Affineur Walo