Why have we raised our forecast for Q3? Market report 26-5-23
Protein concentrates still falling, spot milk price and milk fat rising, cheese and skimmed milk powder slightly rising.
Milk fat prices rose briefly this week, but immediately fell again. However, the current price is still above the level of the week before last. Skimmed milk powder recovered slightly, while the cheese price remained stable and lower value added cheeses continue to catch up.
Last week at PLMA there was still a lot of uncertainty, especially fears of a price collapse in Q3. When asked why the value added mozzarella collapsed, the answer was that a new supplier entered the market who had no idea about the market and therefore destroyed a lot of money. A lot of money could have been saved there with a good consultant.
The prices for Q3 will probably not be communicated concretely until mid-June, so there is no clear price trend at the moment."
And Switzerland:
Switzerland is driving full throttle towards a wall, there is no sign of a change of direction.
The cheese dairies are still not competitive, sales at home and abroad and production are in sharp decline. The warehouses are full and some of the cheese organisations are budgeting with big losses, while the traders are knocking the prices around their ears.
Read our report on this subject:
To the question: Why did we increase our forecast for Q3?
There are a few factors that argue for price increases in Q3:
- 1. the markets have been very stable in the last weeks and even slightly positive since 2 weeks.
- 2. the spot milk price has come off its lowest point and is now back at 35 cents.
- 3. milk volumes are also already falling.
- 4. the GDT auctions were also slightly up.
But there are also the negative factors
- 1. demand is weak.
- 2. this week's GDT auction was negative.
- 3. everyone is fighting inflation and thus higher prices.
Despite many uncertainties, we sense a majority positive sentiment and therefore last week we raised our forecast for Q3 by 2% points to +4% - +8%.
Our recommendation for Q3:
Accordingly, we renew our recommendation. Those who still have storage capacity should buy on the spot market today and stock up for Q3.
We are present at the following fairs:
- Symposium Feines Essen und Trinken, Munich 15/16 June 2023 (as co-exhibitor with Dicke Food).
- International Cheese Award, Stafford GB, 30.6; 1.7. 2023 (as participant)
- Anuga, Cologne 7 - 11 October 2023 (as co-exhibitor with Dicke Food)
- Marca Bologna 16, 17, January 2023
- Salon du Fromage, Paris 25- 27-2-2024^
- Cibus Parma 7 - 10 May 2024
- PLMA, Amsterdam 28- 29 May 2024
- Sial, Paris 19- 23 October 2024
Kind regards, Affineur Walo
