Dairy yield reaches record level

The Countus Dairy Cattle Index is moving higher and higher. A rapid increase was already visible in May and this trend continued in June. Never before has the yield in dairy farming been as high as it is now.

In the last week of June, the Countus Dairy Cattle Index, which was compiled in collaboration with DCA, climbed to a record level of 171.80 points. The ten-year average is 100. At the beginning of the month, the index still recorded 143 points. The rapid increase is a result of improving milk prices and lower feed prices. 

Increasing milk prices
So elevated FrieslandCampina the guaranteed price for June of €0,75 to €36,75 per 100 kilos. Other dairy processors also increased the payout price. On the cost side, stable prices are observable in the roughage market, while the chunk prices mainly went back in price in June. The price of standard A chunk is expected to weaken further in the coming months, according to the Compound feed price indicator† Also the fertilizer costs were significantly lower in June than in previous years.   

Provisional highlight?
Whether the return shows a further improvement in the coming months is doubtful. The forecasts therefore show a slight decrease for the coming months. The question is whether the butter price can hold on to the current record levels. Fat is currently the lubricant in the dairy market, but there is considerable resistance against price levels above €6.000 per tonne for butter.  

The development of the Countus Dairy Cattle Index, from 2004 to 2017. 

The development of the Countus Dairy Cattle Index over the past 52 weeks. The development of the Countus Dairy Cattle Index, including the expected prognosis. 

Wouter Job

Wouter Baan is Head of Meat & Dairy at BoerenbusinessAt DCA Market Intelligence, he focuses on dairy, pork, and meat markets. He also monitors (business) developments within agribusiness and interviews CEOs and policymakers.

w.baan@boerenbusiness. Nl

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