Inside: Dairy Market
Raw material value of milk back to 30 euros
January brings a bit of recovery in butter prices. However, it is too late to make up for anything for the month of December.
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The butter price drops in January to 488 cents per kilo, which corresponds to a fat price of 21,9 cents per kilo. As a result, the fat price fluctuates between the May and June quotations. In the period before May 2017, the fat valuation was below €0,20. Compared to the end of 2016, it is still a plus of 11%.
37
procent
Significant decrease in protein
The appreciation for protein tells a completely different story. The price was 2016 cents per kilo in December 15,6 (at a milk powder price of 198,3 cents per kilo), but in December 2017 only 9,8 cents remained. It is a write-down of 37%.
The raw materials in milk show two opposite movements and this is not without consequences for the appreciation of milk. At 4% fat, it was 2016 cents per kilo in December 33,9, dropped to 29,8 cents in April and shot to a high of 42,1 cents in September. However, this ends the year at 30,3 cents per kilo. The volatile market produces a net result of minus 0,6%. The decline in November was particularly bad.
Bottom in protein?
The futures market also shows this opposite movement in the first half of 2018. Fat prices became firmer again, but protein fell slightly further. Whether this will become the basis for milk powder depends on the steps that Brussels will take. This concerns the intervention arrangement. Will it be a tender or not? And what will happen to the volumes that are already stored?
View the futures market 
The milk price only partially benefited from the higher fat prices.