Inside: Dairy Market
How far can the price for raw milk go up?
For the first time in 6 weeks, the quotation for free milk rises. The Christmas holidays still hinder a bigger step up, but at least the start is back. Meanwhile, processors are lowering the milk price for the first time in almost a year. At what price will the quotations meet again?
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The Dutch quotation for raw milk increases by €52 in week 2 to reach €20 per 100 kilos (delivered at 4,4% fat). For the first time in 6 weeks, the milk price has been given the opportunity to recover. Still with a wide spread of €25 to €15 per 100 kilos.
Pain is in France
In Germany, where according to FrieslandCampinade there is pain in organic milk, the price for free milk is picking up again. For example, the price in the north (delivered at 3,3% fat) increases to €18, while in the south the milk comes to €20. The raw milk trade is described as thin. The size of the volume of skimmed milk is described as larger. DCA does not have a quotation for this, but market experts outline a price of €0,04 for a French product to €0,06 for a German product.
4,10
euro
The cautious recovery in raw milk is a derivative of the rebounding price for cream (€4,10 per kilo ex works) and skimmed milk concentrate (€800 per tonne of dry matter ex works). These are small steps up and that still has to do with Christmas. Finding transport remains difficult and expensive. In addition, several factories in France are closed, resulting in less processing capacity. It puts a smokescreen over the milk collection. It is described as slightly lower, but feels higher due to the less processing capacity.
What does DMK's milk price do?
In the meantime, we are waiting for the milk price of DMK and therefore also the milk price of DOC Cheese. The critical note about the German market gives food for thought and may also be a hint for what will happen to the milk price. At FrieslandCampina it fell by €4. Arla reduced the base less significantly, but already recorded a slightly lower milk price.
In recent years, the outliers in the price of spot milk appear to be greater than in the milk price, but there is indeed a price determination. It would roughly mean that €30 is the turning point. The spot price fell further due to disruptions in processing around Christmas.
The difficult thing is that processors never reduce costs so quickly and that they do not have to do so due to previously concluded contracts. Now the peak in May will be the next measuring point. How high does it reach? If the current trend in milk supply continues, processing will be put to the test again. Based on the milk price, this will be the market challenge in the run-up to May.
FrieslandCampina reduces the milk price for January by €4