Great opportunities for dairy cattle returns

In the last weeks of May, the Countus Dairy Cattle Index showed a sharp recovery. The last time such a trend was observed was in 2007. This time it is a bit more gradual, which may bode well for the price's sustainability.

Price increases have accelerated in recent weeks. That was a combination of the warm weather and buyers who had not covered themselves in time. Meanwhile, the butter price is rising so fast that it is difficult to say what the ceiling will be. Cheese is already sold in advance, which takes some of the pressure off the market. 

Loss of demand?
It is good news for dairy farmers. This is apparent from the Countus Dairy Cattle Index, compiled in collaboration with DCA. That will increase to 21 points in week 143. The ten-year average is 100. The last time the index could rise so quickly was in 2007. It was short-lived then, because a drop in demand quickly reversed the trend. This danger is referred to as topical, but in practice it is not that bad.

The index's forecast shows that the top has not yet been reached. This is partly due to the expected downward trend in concentrate prices. Livestock prices are also doing well. On the other hand, it is still difficult to say how the growing season will develop. The first dairy farmers are bringing in the second cut, but in other places grass growth is stagnating due to the persistent drought and rain installations can already be seen in grassy areas. 

Liquidity trough
It is still early in the year, but the first indications indicate that the so-called liquidity trough will cause fewer problems than a year ago and there is room for building up a liquidity reserve. The differences between companies are large. One can already buffer. The other must first pay creditors or withdraw from the current account. 

More information?
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Herman van den Pol

Herma van den Pol has been with us since 2011 Boerenbusiness and has developed over the years into a market expert Milk & Feed. In addition, she can be seen weekly in the market flash about the dairy market.

h.vandenpol@boerenbusiness. Nl

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