Daily Dairy Digest: Slow Start

The week started as expected with low activity from our buyer's side and it is not expected to increase. Most simply seem to be covered and unless they will get extra demand from their customers they don't expect to come to the market before the end of August. If they will need to buy a few extra loads they also don't seem worried that it will be hard to find. Because most calls we got to come from producers and traders looking for demand for Q3. We see an increasing pressure and we would expect this pressure to stay there for a while. 

The discussion with our sellers seems to end up in the same discussion. The bids that are out there are simply much too low and not realistic. Buyers are willing to pay € 300 to € 400,- premiums for the same product 3 months forward. This premium makes sellers reluctant to lower their prices for closeby. But the reason these premiums are paid is that buyers aren't eager to store products for a few months. The cost of storage and finance are simply too great, and most seem to want to use their cash position to better use.

And with Eid al-Adha, it is expected that the activity from our Middle Eastern partners will remain low as well. Most export strengths seemed to come from the middle east over the last months, therefore we expect export activity to be down this week as well.

And there is good news for the farmers from Friesland Campina, they keep their milk price steady at € 0.43 per litre even though the market action has slowed down a bit, Friesland manages to keep a steady milk price. We expect the other coops to show all increases or very small corrections. Overal we think farmer are ok with the current milk price.