The calculated advance milk price in July 2015 averaged € 30.84 per 100 kg standard milk. An increase of € 0.20 compared to the previous month. Compared to July 2014, this is a reduction of € 7.93 or 20.5%.
Danone effect
For the first time since June 2014 the average milk prices increased compared to the previous month. This increase is entirely due to the higher French milk prices and a seasonal adjustment (Dairy Crest). With a few exceptions, all other dairy companies have reduced the milk prices in July. After the traditional frontrunners Finland Hameenlinnan Osuusmeijeri and the Italian Granarolo the calculated milk prices of Danone (€ 37.76) and the British Dairy Crest (€ 35.26) are remarkably high. Both milk prices have also risen sharply compared to June, although for Dairy Crest this is due to the expiration of the seasonal levy. Danone has increased its milk price in July with € 4.7 per 100 kg.
The contrast with the other calculated milk prices is high. These are all lower than € 30, or sometimes even less than € 25 per 100 kg of milk (DOC Cheese and Glanbia).
Price changes
Although for August some further price cuts have been announced, Arla Foods and FrieslandCampina announced their milk prices in September remain at the same level as in August. Price changes in July 2015 (€ 100 per kg compared to the previous month) and additional information per company:
Milcobel: unchanged
DMK: -1.0, August -1.0
Arla: -0.9 and August – 1.0 and September unchanged.
Danone (A-price): + 4.7
Lactalis: + 2.1
Sodiaal (A-price): +0.7
Glanbia: -1.0, milk price exclusive of coop support (1.5 cent per liter)
Kerry: -1.9
DOC Cheese: -1.0
FrieslandCampina: – 0.5, August -1.5 and September unchanged.
Fonterra and USA:
Fonterra has for the current season from June 2015 onwards, the forecast milk price decreased from 5.25 to 4.30 NZD per kg of milk solids. This milk price comprises an expected dividend of 0.45 NDZ. As a result the milk price of Fonterra is at its lowest level since 2005/06 (4.10 NZD).
USA: -0.1 Expressed in dollars, the US Class III milk price decreased in July from to $ 16.73 to $ 16.33 per hundredweight (45.36 kg). US milk prices this year are about 40% lower than in the previous record year.
Market situation
Official Dutch dairy quotations (€ per 100 kg):
2/9/2015 5/8/2015 2/1/2014
Butter 262 269 406
Whole milk powder 198 187 379
Skimmed milk powder 167 166 330
Whey powder 54 53 99
Ample supply and a wait and see attitude among buyers have, since March this year, resulted into a firm downward trend in prices of various products. Private storage of butter in particular in the EU brought insufficient relief. Prices of skimmed milk powder are moving into intervention level and in some Member States on a limited scale products are offered for intervention.
Though the latest Fonterra Global Dairy Trade (GDT) auctions in August showed price increases, it is too early to see this as a start of a more fundamental improvement of the market.
Thanks to Willem Koops (www.milkprices.nl )
