Inside: Dairy Market
Milk price Arla in February just above 30 euros
Arla announces that it will further lower the milk price in February. It is the second reduction in a row due to lower prices for dairy products. It is not yet known how the reduction will affect the Dutch milk price.
Read this article?
Become a subscriber and get instant access
Choose the subscription that suits you
Since the prices of various dairy products reached historic highs in 2017, they have fallen sharply again. It has consequences for the milk price. For example, Arla already announced in January that it would reduce the basic price by €2,50. The milk price will drop again by a similar amount in February.
Second decline in a row
The British branch of Arla has announced that it will reduce its base price by £00,0173 per litre. In January, these livestock farmers could still fall back on a premium from an emergency pot, but now they are also having to deal with a major correction. Without taking into account the exchange rate, this amounts to a minus of approximately €00,0198 cents per liter or €2,00 per 100 kilos of milk.
In the Netherlands, Arla's milk price (4,4% fat and 3,47% protein) drops to €31,06 per 100 kilos. This with an annual supply of 600.000 kilos of milk. This is a decrease of €2,58 per 100 kilos. This means that the milk price is falling slightly faster than the milk price in Germany and Belgium. In Belgium, the raw material price goes to €30,40 per 100 liters (with 42 grams of fat and 34 grams of protein).
The explanation of the milk price makes it clear that mainly the decreases in fat prices have an impact on the milk price. For example, the price of butter has lost almost 40%, while the price of cheese fell by 30%. In recent weeks, the market has seen a stabilization of dairy prices, but this is insufficient to offset the effect of the significant reduction.
Protein decreased less
The only product that was somewhat spared during the reductions was milk powder. "Although prices also fell there, the decline was less drastic due to the already lower valuation of the manufactured products," Arla reports in an explanation.
FrieslandCampina will announce the new guaranteed price on Monday, after which DMK will announce the new price on Wednesday. It is inevitable that these prices will also fall, although so far these reductions have been less drastic than those implemented by Arla.
€1 = £0,8744 
Milk price in the Netherlands in February was just above €31 per 100 kilos of milk.