March Madness

March is off to a super start. We traded over 600mt yesterday, all volumes between cheese and butter. Prices continue to decline as pressure from sellers mounts and liquids start to trade lower as demand is low and production is high. Prices are now back to levels of before the Gulfood week, so those who went skiing only to return today are seeing the same prices as when they left. 

The only difference, we see that sellers still have plenty to sell, but buyers seem to be with sufficient stock. And with prices for raw milk trading again lower, producers now have to make a decision on what to do. Sell their commodities or their raw milk lower? With raw milk prices trading toward 30cts again it does seem likely that the production of commodities will increase over the next weeks.

Asking around in Ireland it seems milk production is starting to pick up fast now. After a slow start in February, March volumes seem to be in line with the forecast or even a bit higher. We must admit that feedback from different coops varies a lot. But the general sentiment seems to be that Irish milk production will be good in the next 6 months. There are concerns about their end of the season. If milk prices drop below cost price, Irish farmers might stop milk production early this year and H2 might show a lot less Irish milk.

The market for liquids traded lower, with raw milk around 30ct, but in France, we see prices for spot milk even at 26-28ct. SMC and Whey concentrate seems to be losing value with drying capacity almost fully used. SMC is trading between € 1600 and € 1800 while whey concentrates reportedly is available between € 50-€150 per mt.