European dairy commodity markets are experiencing significant downward pressure, with several key indicators fall to their lowest levels in years, according to DCA Market Intelligence.

DCA Market Intelligence B.V. is a leading price reporting agency (PRA), specialising in independent benchmark assessments and market analysis within the international agri-food business.

DCA benchmark prices for raw milk have slipped below €25/100kgs, reaching their lowest point in five years, with Northern Germany showing the weakest levels.

Market participants report growing difficulty in finding outlets for both whole and skimmed milk.

This limited demand also explains the wide spread seen in skimmed milk price inputs, according to DCA.

Other commodities

As weakness persists in milk markets, other dairy commodities are also under pressure.

Cream and skimmed milk concentrate (SMC) continue to trend downward, with the DCA SMC benchmark now falling below €1,000 for the first time since the start of the coronavirus crisis in Europe.

Conditions remain challenging in the butter sector as well, where prices hover around €4,000/metric tonne.

Cream prices are also falling, despite the usual seasonal lift in demand leading up to Christmas.

Seasonal disruptions

Looking ahead, market sources expect that the upcoming Christmas and New Year production disruptions will add further pressure across the dairy complex.

Butter, cream, and anhydrous milk fat (AMF) are all losing significant value again this week (December 5).

Cream and butter now trade at nearly the same price level, which according to DCA is unusual for this time of year.

German butter sits at the upper end of the north-west European range, though differences with other origins are small.

AMF markets also show a wide spread of €500/t in reported inputs.

Strong milk production in north-west Europe continues to maintain abundant stocks, even as Dutch production figures decline.

Butter for quarter one delivery is reported below €4,000/t, a level not seen since 2021.

Downtrend in cheese

The pressure is not limited to milk and fats, with the cheese market also reflecting the broader downtrend.

Mozzarella saw the sharpest week-on-week decline, dropping 4.68% to €2,850/t.

Emmentaler, meanwhile, showed the widest price dispersion, closing at €3,875/t with reported prices ranging from €3,800-€4,250.