The calculated advance milk price in April 2015 averaged € 31.44 per 100 kg standard milk. A decrease of € 0.26 compared to the previous month. Compared to April 2014, this is a decrease of € 7.66 or 19.6%.
Decline in EU
A slight decline of milk prices in April is not particularly. Usually in spring milk prices fall and start rising again from May onwards. A milk price increase in May this year is very doubtful. On the dairy market prices are still under pressure and large companies FrieslandCampina and Arla have announced price cuts in May and June. In April, four dairies increased their milk prices ranging from + 0.5 (DOC Cheese) to +1.6 (Arla) euro per 100 kg, while seven dairy companies have reduced their milk prices. The calculated milk price of British Dairy Crest has decreased most (minus € 2.9), but this is entirely due to the seasonal adjustment in April.
Uk and Ireland
In March and April the milk price paid by Glanbia Ingredients Ireland has been reduced by € 1 per 100 liter. These price reductions are offset by top ups of the same amount paid by the cooperative Glanbia to members from the so-called market stabilization fund. The calculated milk price is excluding these top ups. British First Milk introduced an A and B – system from April onwards. The calculated milk price is based on the A price.
Fonterra
New Zealand’s Fonterra has revised their forecast milk price for the current 2014/15 season at April 30 and May 28 from 4.7 to 4.4 NZD per kg milk solids (fat and protein). Including an announced forecast dividend the chances amount to a milk price of 4.65 NZD which is far below the levels of recent years. Since the 2006/07 season the milk price of Fonterra has always been more than 5 NZD per kg fat milk solids. Fonterra: -1.1 Fonterra revised their forecast milk price for the 2014/15 season to 4.4 NZD per kg milk solids. Including a forecast dividend of 0.25 the calculated milk price for standard milk is retrospectively form June 2014 onwards based on 4.65 NZD per kg milk solids.
Market situation
Official Dutch dairy quotations (€ per 100 kg):
27/05/2015 29/04/2015 2/1/2014
Butter 294 302 406
Whole milk powder 232 268 379
Skimmed milk powder 175 185 330
Whey powder 67 77 99
Due to the seasonal peak the European milk supply is sufficient. Buyers still remain cautious and orders are postponed in anticipation of a further decrease of market prices. This means there is continuing pressure on prices. Since March, the Dutch price quotations are in a downward trend.
World market
The world market prices show a similar development as European prices. The sharp fall in prices on the GDT auction in April and May reflect the picture that there is less demand and sufficient supply. Positive from a European perspective remains the relative weakness of the euro against the dollar, making European products relatively more competitive on world markets. The question is when it comes to a turning point in the market. The development of the European milk production in a quota-free era plays an important role. If growth is less than expected and international demand starts to improve, this will have a positive effect on the market situation.
Thanks to Willem Koops from www.milkprices.nl and ZuivelNL.
