EU cheese prices reach seven-year low

January 27, 2023

2 mins read

During the week ending 26th January, EU market cheese prices continued the same downward trend that has existed over the last two months. Prices do not appear to have bottomed and reached new lows, breaking the EUR 3,000/MT barrier.

Market fundamentals remained the same. With strong milk supply still being reported, this supply is being channelled to the cheese vats, while demand is subdued. Due to the high farmgate prices and lower input costs, which have led to strong profit margins for farmers, milk collection has increased significantly. According to market participants, milk output estimates for Germany in January 2023 are 4% higher than the same period last year. Stocks keep growing, leading to lower prices particularly for older cheese (8-10 weeks for gouda). One source indicated, “there is too much old cheese available in the market. We can see gouda with eight weeks, which has to move quickly if it is to be sold for slicing.”

Market participants see new support levels for gouda and edam, ranging from EUR 2,500/MT to EUR 2,600/MT. “All indicators point to bearish market sentiment, and prices could reach EUR 2,500/MT,” said one market participant. However, as another source stated, “If this price level is realised, actual farmgate prices are too high to sell gouda at EUR 2,500/MT, resulting in losses for cheese makers. Therefore, EU cheese prices will not stop declining until farmgate prices are lower and, consequently, farmers will slow down milk supply into the market”. Furthermore, demand remains unchanged, both in the retail and foodservice sectors. Interestingly, retail prices lag commodity prices, not reflecting the new lows in the cheese market. As a result, demand will not be reactivated until price drops reach end consumers, which will likely occur soon and help EU cheese prices find a support level.

For reference, the Mintec Benchmark Prices (MBP) for Gouda EXW Europe [Mintec Code: J114] was last assessed on 26th January at EUR 2,795/mt, down EUR 255/mt during the week. Meanwhile, the MBP for Edam EXW Europe [Mintec Code: J113] stood at EUR 2,795, down 7% w-o-w.

As with yellow cheeses, the Mozzarella price was unable to avoid the overall price downtrend. The MBP for Mozzarella EXW EU [Mintec Code: ED27] was last assessed on 26th January at EUR 2,645/mt, down by 7% w-o-w.

Topics: Dairy & Eggs
Jose Saiz
Jose Saiz

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