Inside: Dairy Market
Milk supply starts 2018 slightly higher
Milk supply in January is slightly ahead of last year's level. Will this remain the case in the coming months, given the declining milk prices and the possible standstill at FrieslandCampina?
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Dutch dairy processors collected a total of 1.229.310 tons of milk in January. This is slightly higher (+0,16%) than the same month last year. Compared to the 5-year average (1.159.100 tons), this is a plus of 6,05%.
Although the increase (compared to 2017) is nil, we can speak of an ample milk supply. This also corresponds to sounds made by dairy processors. The fat percentage in milk in January was 4,47%, compared to 4,54% in the same month 1 year earlier. Both percentages are relatively high.
Uncertainty in milk
The milk supply in the Netherlands has increased since last September increased significantly, compared to levels of previous years. This is in line with the milk price, which at the time rose to above €40 per 100 kilos at almost all processors. In the meantime, however, milk prices are showing signs of decline again considerable decline, where the bottom is not yet in sight.
Dairy farmers report that the milk value has been stable at around €30 per 100 kilos for some time. On the spot market (week 5: €25 per 100 kilos) the quotations are still considerably below this. This suggests that milk prices may still face downward corrections, given the payment prices noted above.
It is therefore still somewhat uncertain whether the milk supply will remain at a high level in the coming months. The possible stand still at FrieslandCampina this uncertainty is even more prevalent.