April milk price can still beat the bank

The majority of Dutch milk prices have shown a decrease to a greater or lesser extent since January. Only DOC Cheese/DMK chose to take the pain all at once and reduced prices sharply from December to February, but has since recorded a stable milk price at world market level.

This amounts to a price of €30,55 per 100 kilos (with an annual supply of 500.000 kilos of milk, with 4,41% fat and 3,47% protein). For an average Dutch company with 800.000 kilos of milk (with 4,41% fat and 3,47% protein), the milk price is €32,07 per 100 kilos.

FrieslandCampina under €34
DOC Kaas is one of the two parties in the Netherlands that fails to keep the price above the limit of €1, an amount that is still used by the banks as the indicative milk price for financing. The other party, which lost sight of the €2 in April, was FrieslandCampina. The milk price there fell to €33,70 per 100 kilos. This is a minimal difference, because in May the gap will grow to €0,80 per 100 kilos. 

(Text continues below the chart)Dutch milk prices remain above the world market level. 

It is the cheese makers who manage to maintain the €34 mark. For example, Cono says he will lower the valuations for fat and protein for April to €3,15 and €6,89 per kilo respectively, but the milk price will still be €34,10 per 100 kilos. Call Leerdammer closes with €34,29 per 100 kilos, but A-ware goes for the highest price and pays €34,55 per 100 kilos.

The common thread is that it is worthwhile for dairy farmers, with an annual production of more than 600.000 kilos of milk, to switch to one of the above-mentioned cheese makers. If the size of the milk pool decreases, FrieslandCampina's milk price will improve again. 

The Netherlands is performing well
In general, Dutch milk prices perform relatively well within the European Union (EU), but they also have a plus compared to the world market. This is evident from the milk price comparison, compiled by LTO Netherlands. In the comparison, Fonterra records a price of €30,62 per 100 kilos for March. This is for an annual supply of 500.000 kilos of milk, 4,2% fat and 3,47% protein.

In the United States (US) the milk price is starting to pick up again, resulting in a milk price of €29,35 per 100 kilos for March. Due to the minuses in Dutch prices and the pluses in the US, the gap between the milk price on the world market and that in the Netherlands is starting to decrease. Fonterra has a less flexible milk price, which is only adjusted a few times a year.

Once again the trends show a contradiction. For example, the appreciation of milk is falling in the EU, while it is rising in the US. However, the starting position was very different and now that milk prices are meeting each other again, the playing field is starting to become more level. It should be noted that the cost price in the EU is significantly higher than in the US.