Is France Painting “Le Future”?

Yesterday was quite an active day from our point of view. We see all commodities trading slightly lower again, be it only slightly. Butter prices dropped roughly € 50,- per mt, cheese traded roughly € 20,- per mt lower and SMP prices dropped only € 25,- per mt. We see the same trend on the EEX futures, and we hear similar stories on liquids. 

Cream prices dropped slightly to levels between € 6100 and € 6200, raw milk prices are trading below 40ct and whey concentrate is available below € 400,-. Only SMC remains expensive, although we hear big differences in regions. In Germany the product is tight, but in France, all liquids are more widely available at lower levels.

And with that fact, it seems France is giving a small peak into the potential future for EU commodities. French milk volumes have declined for a long time, but are now strongly recovering. But demand in France has been struggling for months already leaving the French producers with a lot more free milk compared to last year. Some of the liquids are overflowing into the surrounding countries, but the French also have to produce more commodities. At the end of last year, we were already reporting on more French butter and AMF but we hear more product is expected to turn up in Europe. Mozzarella and Emmental prices are starting to get affected slightly and French SMP and whey are also offered around more.

And with France being the biggest producer of dairy in the EU and the biggest consumer of dairy products the declining demand and the rising supply could indicate a turning point for the EU dairy industry.