Firming Markets

Yesterday the market continued to trade at slightly higher prices. The quickly rising cost of SMC, cream and raw milk are leading the way. We spend the morning walking the halls at the PLMA in Amsterdam, discussing the market with our partners there, and trying to figure out what is driving this quick increase. But we have to admit that we haven't spoken to anyone who has a simple explanation. 

The overall consensus seems to be that producers are much better able to handle the strong supply without feeling the pressure to sell, while buyers have waited too long for the market to break under the weight of this strong milk supply. Now the milk peak is behind us and demand for cream and SMC is rising due to the good weather, buyers start to realise they waited too long. Looking at the dynamics between buyers and sellers, we think the buyers will have to accept the higher asking prices of the sellers.

We have a few more weeks before the summer holiday season starts, and we know most purchase managers like to have their books closed a few weeks before they go on leave. Therefore we expect the next few weeks to get a bit more active before the activity will slow down again in July and August.

But with most of our partners travelling today to the lovely city of Warschau we expect today (and the coming days) to be a bit more quiet. Unless the drinks at the bar tonight add extra oil to the fire. As said, sometimes these events can cause the market sentiment to get an extra boost. We wish all of our partners there a good time, good energy and a strong liver.