The calculated advance milk price in May 2015 averaged € 30.83 per 100 kg standard milk. A decrease of € 0.34 compared to the previous month. Compared to May 2014, this is a decrease of
€ 7.68 or 19.9%.
Milkprices lower
Milk prices are on average almost € 31 per 100 kg, but this is mostly due to the relatively high milk prices of Finnish Hämeenlinnan Osuusmeijeri and Italian Granarolo. When milk prices of these two companies are excluded, the average is (just) below the € 30 (€ 29.94 per 100 kg). The calculated milk prices of the French dairy companies, British Dairy Crest and FrieslandCampina are still above € 31 and Danish Arla just below (€ 30.75). It should be noted the milk price of FrieslandCampina is exclusive of the seasonal levy of € 2.30, because these seasonal deductions (and bonuses) are not deducted (distributed) but are balanced and charged at the end of the year. Including this levy in May milk price of FrieslandCampina reduces from € 31.11 to € 28.81 per 100 kg standard milk.
UK and Germany
Irish dairy farmers supplying Glanbia receive the lowest milk price (€ 27.47). the recent price reductions are offset by a payment by the cooperative Glanbia from the so-called market stabilization fund this benefit (May to € 3 per 100 kg). These payments by the coop are not included in the milk price calculation. Compared with April milk prices of Müller and Kerry decreased most, namely by about € 2 per 100 kilograms. Danone and Granarolo have increased milk prices in May. For June and July, Arla Foods and FrieslandCampina announced price reductions of -1 and -0.9 (Arla) and -1.5 and -0.5 (FrieslandCampina) per 100 kilograms. Dairy Crest has announced a price increase from August of 0.5 (0.25 pence per liter).
First Milk (A-price)
Retroactively calculated milk prices from April 2015 of First Milk are adjusted due to changes in the milk payment scheme. As valid from April a premium of 1 pence per liter (ppl) is included in the calculated milk price as a bonus for a bacteria count below 50 per ml (previously 0.5 ppl) and 0.5 ppl for milk with a somatic cell count between 200 and 250 (previously 0.3). The payoff for fat content is from April differentiated between cheese butterfat and whey butterfat Cheese butterfat is equivalent to 120% of the protein content. For the excess amount of fat (whey butterfat) a lower price is paid. This means that for standard milk with 4.2% fat and 3.4% protein 4.08% (= 1.2 × 3.4) of the fat is paid out as cheese butterfat and 0.12 as whey butterfat. As a result of these adjustments, the milk price in April was corrected from 28.11 to 27.84.
Fonterra
Fonterra: -1.5 completely due to lower value of New Zealand Dollar against the euro.
Fonterra announced their opening forecast milk price for the 2015/16 season to 5.25 NZD per kg milk solids. This opening milk price is higher than the current season (4.40 exclusive of dividend), but much lower than milk prices in previous years.
Official Dutch dairy quotations (€ per 100 kg)
2/7/2015 27/05/2015 2/1/2014
Butter 294 294 406
Whole milk powder 222 232 379
Skimmed milk powder 172 175 330
Whey powder 59 67 99
Market situation
In several EU – Member States much more milk is produced. This provides extra supply, which cannot be absorbed automatically by the market. Moreover, since a long time been demand is disappointing. The reduced the willingness of China to buy and Russian important ban play an important role. The wide range and the reluctance of buyers have already led from March to a sharp fall in the Dutch official quotations. However, there are some weak signals price levels are reaching a bottom formed on the market. It is to wait for the time being when it comes to a turning point in the market. How the European milk production will develop in the post quota era plays an important role. If growth ultimately is less than expected and international demand is going to pick up again, this could have a positive effect on the market situation.
Thanks to Willem Koops (www.milkprices.nl).
