Uncertainty often trumps 'good milk price'

A good milk price, above €35 per 100 kilos, used to be the starting signal for investing. This appears not to be the case in 2017. Despite the fact that the milk price exceeded €40 in various places in October, the willingness to invest remains limited.

Uncertainty dominates
Inquiries from dairy farmers show that the uncertainty about the phosphate rights system in particular calls for caution. There was also tension all around until Tuesday, October 31 the appeal from former State Secretary Martijn van Dam. Now that Van Dam has won, there is another one little bit of uncertainty taken away. 

It resulted in immediate action. "In fact, the telephone started ringing more often on Monday, October 30, asking for phosphate rights," says Christiaan Visser of Fosfaatrecht.nu. Visser reports that the supply had virtually disappeared by the end of the day on Tuesday, October 31. “The last case took place at €185 per right.” At Farmel, the outcome of the lawsuit was the starting signal for more trade. "The current asking price is €200 per right," says Eric Peters, from Farmel.

Investing in feed
If there is money left on the dairy farm, this will not only go to phosphate rights, but also to investments in feed. Feed potatoes, spent grains, but also concentrates are in demand. More is possible again. It is partly necessary to replenish the quick silage, but on the other hand it is used to optimize milk production. "A big difference with 2016," says a De Heus employee.

In the meantime, dairy farmers are able to rake in top prices with the help of the high levels. Some even achieve a fat content of 4,9%. "I heard milk prices of around €45 several times on Tuesday," says an employee of Vulpen Voeders. However, it does not yet result in additional investments.