Inside: Dairy Market
Contrary market yields striking milk price
The prices of fat and protein are diverging further and further, but the milk price is not affected. The opposite even turns out to be true. It brings the indicative milk price to just below the record of 2013.
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The butter futures market has taken a step back in recent weeks, but seems to be stabilizing again towards the end of October. For October and November the price managed to maintain itself above €5.000 per tonne, which is still a high price level. December in particular had to give up and recorded an opening price of €25 per tonne on October 4.750.
4.750
euro
Fat and protein are not yet closer to each other
The lower prices for butter do not yet bring the prices of fat and protein closer together. This is because skimmed milk powder also had to take a step back. The lower prices for milk powder are the result of actions in Brussels. For example, Brussels sold a small volume of skimmed milk powder at a price of €1.440,50 per tonne. It is kicking the bottom out of the market and has dropped the price for the October contract to €1.425 per tonne. November is trading at €1.463 per tonne.
It looks like the milk price will have to drop in October. For the month of September, the German Food Economic Institute (IFE) presents an indicative milk price of €0,421 per kilo (at 4% fat and 3,4% protein). That is a plus of €0,03 compared to August. Since April 2017, the milk price has increased by more than 41%. On average, the milk price from September 2016 to September 2017 is €0,3489 per kilo.
The futures market yielded an indicative milk price of €0,421 per kilo for September.