Phosphate rights price continues to increase

The prices for the phosphate rights are climbing again towards the end of March. Broadly speaking, trade is an extension of the situation from last week. Although business is back to normal, trading is still described as calm. 

Higher price
Yet the extra things deliver a higher price on. It looks like the price is getting a chance to move up to a more realistic level. It provides a price range of €180,75 to €183,25 per right, which translates into a average price of €182 per right. The majority of transactions concern 5 to 7 cows, although transactions up to 15 cows are also reported.

When rights are purchased, this is primarily done to absorb the 8,3% discount. In lesser situations, the higher milk production per cow also plays a role. A few point to the 'May count', which provides insight into manure accounting and is said to encourage action. A higher production per cow means that more allowances are needed to absorb the phosphate production. However, this is by no means confirmed by all parties.

Feed advisors even show that if the milk production per cow remains so high, dairy farmers have too few rights at the end of the year. They signal that dairy farmers are not yet sufficiently concerned with the consequences of a higher milk production per cow. Another reason, which, however, is only the argument for buying, is the expansion of the livestock. This is to put more cows in a new barn.

Why doesn't buyer buy?
The calmness of the buyers is explained in various ways. For example, the lack of clarity surrounding the Condensation Regulation is pointed out. However, there is more unclear, because the derogation for broader manure standards has not yet been granted. In addition, buyers find the price too high.

How the offer will develop remains guesswork. It is not even certain whether the dairy farmers who participated in the stopper scheme and wanted to sell rights have already done so. There is also uncertainty about entrepreneurs who have postponed stopping. Are they still milking, or have the rights already disappeared from the market?

On the other hand, sellers are aiming for higher prices. The year is not yet 3 months old and with that they still have plenty of time. So it doesn't look like prices will drop any time soon. This sets the frames. New developments should boost the market again. Until then, the stalemate between buyers and sellers dominates the playing field.