Dairy yields are climbing slightly

The Countus Dairy Cattle Index has been on the rise again since mid-February. The reason for this: slightly improving milk prices at most dairies in February and March and stabilization in April. Feed prices, on the other hand, are higher. 

The ''mistake'' FrieslandCampina made with the guaranteed price in January was partly compensated in February and March. Excellent prices for fat products ensure that milk prices remain stable. Low valuations for protein are not a danger, as long as cheese, whey, cream and butter can be marketed at good prices. In addition, the milk supply was certainly not excessive in recent months.

Slight decrease expected
The slightly improving milk prices mean that the Countus Dairy Cattle Index has risen in recent weeks by 7 points to 122,3 points. This means that the index is at its max for the time being. The forecast predicts a slight decline in the second quarter. Historically, the dairy market has seen some challenges in these months, given that milk supply is steadily increasing in Europe. As long as the manufacturers continue to calculate with the current levels, there is no reason to adjust these forecasts. 

Feed costs up
Prices for cattle rose for the fourth month in a row in March. On average, prices rose between 10 and 25 euro cents per 100 kilos of beef chunks. In view of the fact that the soy price has fallen sharply, some price relief is on the horizon. The wheat price on the Matif is also in a downward sentiment. Both markets are struggling with ample acreage figures for 2017 and also ample stocks of old crops. It is therefore expected that feed prices will level off this summer. 

Wouter Job

Wouter Baan is editor-in-chief of Boerenbusiness. He also focuses on dairy, pig and meat markets. He also follows (business) developments within agribusiness and interviews CEOs and policymakers.

w.baan@boerenbusiness. Nl

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