Record cream price breaks through €10,000 barrier

Prices in the European dairy market remain high as the holiday season approaches. DCA Market Intelligence reports that its cream price index for Northwest Europe surged to a record high on Thursday, surpassing the €10,000 per ton mark. This historic milestone is largely attributed to tight milk supplies within the European Union, leading to shortages across the dairy sector.

As a Price Reporting Agency (PRA), DCA Market Intelligence provides the agri-food industry with independent benchmark prices, market data, and insights. The agency publishes weekly price indices for 25 dairy products, including milk powder, cheese, mozzarella, butter, and cream. Cream is a highly sought-after ingredient in the industry, used as a base for products such as butter, ice cream, cheese, whipped cream, coffee cream, and pastries. Alongside the processing demand, consumer preference for full-fat dairy products like cheese is also rising.

Cream prices had been nearing the €10,000 mark for some time but stayed just below it until now. This week, the DCA Benchmark Price for cream climbed by €175 to reach €10,155 per ton.  “We've compiled cream prices since 2011, and just a few years ago, such levels seemed unimaginable,” says Eric de Lijster, Manager of PRA at DCA Market Intelligence. “Since the onset of the Ukraine conflict in early 2022, the market has shifted significantly, resulting in structurally higher dairy prices.”

The elevated price levels in the European dairy market are underpinned by a strong demand for milk, making it a scarce resource. Dairy producers are faced with tough choices on milk allocation – whether to produce milk powders, cheeses, ice creams, or butter – as DCA benchmarks indicate high prices across all these segments. Milk supply, however, remains limited. Many dairy farms are ceasing operations due to lack of succession or stricter regulatory policies. In the Netherlands, milk production has declined by 2% this year compared to the same period in 2023. Poland has recently overtaken the Netherlands as the third-largest dairy producer in the EU, following Germany and France. Additionally, seasonal factors contribute to the supply constraints, as cows typically produce less milk in autumn.

Whether cream prices will continue to rise remains uncertain. Although supported by strong butter prices, milk production in Northwest Europe is expected to recover soon. Historically, cream prices tend to drop sharply after late November as holiday-related "broken trade weeks" approach. However, given today’s unique market dynamics, any prediction remains speculative.