Daily Dairy Digest: 17th of November

Yesterday we had a slightly more active market, but in general not much has changed since yesterday. The market for liquids is trading traditionally firm thought this time of year and those in need of fresh products pay higher prices. The big question is how much the supply and demand balance is changing and how heavy the impact on prices needs to be. 

Today we saw the export numbers from the EU for the month of September. With a minus of more than 7% compared to the year before, the EU is exporting much fewer products. Butter seems to be the quickest in decline losing more than 15%, but cheese export is also down a little over 3%. These numbers confirm the stories we have heard from traders and producers that demand was slowing down. The worrying part of this is that demand in October (and now in November) also seems to be much lower so the decline is likely to show in the months ahead.

Quotations start to reflect better and better the market prices we see. The French butter quotation did show a surprising move by quoting € 540,- per mt lower, and the Durch butter quotation also showed another decline, now posting € 5850. Only the germans went up to € 6200,-. On SMP we see the quotations reflecting the market sentiment as well, all posting a negative number and now averaging at € 2967.

We noticed that even though the prices corrected down 2.5% compared to last week, in dollars the price went up 1%. This for us describes the EU situation best. Even though prices in the EU are going down, we are still getting more expensive on the export markets, making export harder, even at lower levels.