Milk Market: Price Explosion? Market Analysis from 30 August 2024 (Monthly Report)
Feed costs falling, protein concentrates and skimmed milk powder stable, cheese and spot milk rising, milk fat strongly increasing.
Review and Current Situation
Almost a month has passed since our last newsletter. It's time to review the developments for 2024 in a monthly overview.
Our Forecasts Confirmed
Since May, our predictions of rising prices have been validated. Here are some of our headlines:
- **24.5:** Is the Bull Market Coming?
- **31.5:** Sky-High Prices in Q3
- **14.6:** On the Verge of a Price Surge?
- **17.7:** Has the Summer Storm Driven Away the Bears?
- **26.7:** Are the Bears Finally Driven Away?
- **2.8:** Milk Shortage in Autumn?
Now, at the beginning of September, we are witnessing exploding prices. Regular readers of our newsletter had the opportunity to act accordingly. Buyers should have secured their positions for Q3 and Q4 by June at the latest, while sellers need not panic, as prices will inevitably rise in autumn.
Price Developments in August
Milk fat prices have risen significantly in August, reaching new record highs. Meanwhile, the prices for proteins have remained largely stable.
Situation in Switzerland
In Switzerland, butter warehouses are still full, and there is an oversupply of milk. We believe this is primarily due to state-managed production.
As milk fat prices rise while protein prices remain stable, the Swiss milk market, which is geared towards protein exports, is falling into imbalance.
The fourth-largest milk processor, Hochdorf, has sold its operational business to AS Equity Partners and placed the holding company in a moratorium. It remains unclear who the investors behind AS Equity Partners are. Inside Paradeplatz quotes: "It is notable how much AS Private Equity remains silent about its partners and investors on its website. Not a single sentence can be found."
Price Explosion?
Milk fat prices have once again risen significantly in August, leading to higher milk prices. One could certainly speak of a price explosion. Typically, such massive increases are followed by significant declines within 6 to 12 months, as production rises, and demand markedly decreases.
Prices for milk proteins have remained stable.
Forecast for Q4 and Q1 2025
Price Development in Q4 2024:
- Milk fat prices will continue to rise, although short-term corrections are possible.
- Protein prices will increase moderately.
Price Development in Q1 2025:
- As milk production can only be moderately increased in the short term, we expect high prices to persist in Q1 2025.
We will be present at the following trade fairs:
- Sial, Paris, 19–23 October 2024, stand 7 B 002
- Marca, Bologna, 15–16 January 2025
- Winter Fancy Food, Las Vegas, 19–21 January 2025, with our partner World's Best Cheese
- Sirha, Lyon, 23–27 January 2025
- Tutto Food, Milan, 5–8 May 2025
- PLMA, Amsterdam, 20 & 21 May 2025
- International Cheese Awards 2025
- Summer Fancy Food, New York, 29 June – 1 July 2024, with our partner World's Best Cheese
- Le Mondial du Fromage et Produits Laitiers, Tours (France), 14–16 September 2025
Best Wishes, Affineur Walo
