Dairy fat prices decline on bearish fundamentals.

March 10, 2023

2 mins read

EU cream prices fell week-on-week (w-o-w), with market participants reporting a bearish market sentiment during this week’s assessment period (2nd March 2023 16:00 BST – 9th March 2023 15:59:59 BST). Price declines have been primarily due to increasing availability, as milk intakes across key producing regions, such as Poland, Germany, and the Netherlands, are increasing. The availability was further supported by high milk fat percentages within the milk. Further bearish pressure was generated by low demand, as buying interest for cream across the EU was reported limited. The MBP for European Cream EXW 40% [Mintec Code: ED25] was down €250 on the week, at €5,000/mt. 

The market sentiment for EU unsalted butter was reported slightly bearish during the week, with prices declining compared to the previous week. While there is still some demand, increasing availability is becoming a bigger factor. Strong milk intakes and high milk fats supported butter production. With liquid prices falling notably, producers are once again looking to process cream into butter, due to better storage capacity. Following the price rally in February, market activity was reported limited during the first two weeks in March. While butter stocks are growing, as production is outweighing sales according to multiple market sources, processors are not in a rush to sell. Even if stock levels are high, free storage capacity remains in the market. However, there is still uncertainty surrounding older stocks and how willing producers are to carry over older stock into the new flush season. The assessment for Unsalted Butter EXW European Union [Mintec Code: J116] was made at €4,700/mt, down €150/mt w-o-w.

 



Topics: Dairy & Eggs
Sandro Schulz
Sandro Schulz
EMEA Protein Team Lead

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