European cream price reaches historic high

As the holiday season approaches, prices on the European dairy market continue to climb, with cream standing out as a significant increase. The DCA dairy index for cream in Northwest Europe hit a record level of over €10,000 per ton on Thursday, according to market research agency DCA Market Intelligence. This price point is a result of a limited supply of cow’s milk within the European Union, causing market shortages.

Market pressure due to scarce milk supply

Cream is a sought-after ingredient used in products like butter, cheese, ice cream, and whipped cream. Besides the demand from the industry, consumers are increasingly opting for full-fat dairy products. Rising demand for milk has made this raw material scarce, forcing dairy producers to make strategic choices: milk can be allocated to various products, such as powders, cheeses, and butter, all of which are also seeing high price levels. This limited milk supply is further impacted by challenges in dairy farming, including succession issues and stricter government policies, contributing to a drop in milk supply.

Possible decline after the peak

Although the cream price has now crossed the ‘magic threshold,’ it is uncertain whether this level will hold. The cream market is currently supported by rising butter prices, but milk production in Northwest Europe appears to be stabilizing. Historically, cream prices tend to drop toward the end of November when the holiday season brings “interrupted trading weeks.” Whether this trend will repeat itself this year remains unpredictable in the current unique market situation.

dcamarketintelligence.com