Inside: Dairy Market
Raw material value of milk falls
The raw milk commodity value plummeted in November, according to figures from the Food Institute (IFE) in Kiel, Germany. The sharp fall in prices is the result of some dairy commodities that are under pressure.
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Based on 4% fat and 3,4% protein, the value of milk is €32,90 per 100 kilos. This is a decrease of €6,40 compared to October. Compared to September, almost €10 of the raw material value of milk has evaporated.
The price drop is a result of butter prices that have fallen sharply in recent months. Since the end of September, the butter price in Germany has fallen by €2.475 to €4.450 per tonne. The same trend is visible in the Netherlands. The Christmas production has not provided the expected counter-movement.
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The falling butter price seems unstoppable.
Also milk powder a cheese down
Skimmed milk powder is also declining at a steady pace, while the price of cheese is also under pressure. The price of Gouda 45 in Germany was still above €3.500 this summer, but fell below the 'psychological' limit of €3.000 per tonne last week. It is expected that the price paid to dairy farmers will respond to the declining dairy market in the coming months.
The spot prices of raw milk usually respond more directly to the movements of dairy commodities. When butter was still at record levels, spot milk traded well above €43 per 100 kilos for weeks. It will be mid-December spot milk traded in the Netherlands for 'only' €18 per 100 kilos.