Price increase phosphate rights explainable?

When the price of phosphate rights increases by more than €1 per right in 10 week, this is often clearly explainable. Extension of derogation. A rising milk price. A change in policy. Such developments have led to a revival in demand in recent months. Demand has not explicitly increased this week. The guaranteed price also leveled off FrieslandCampina off, already increased DOC Cheese well.

Nevertheless, the DCA quotation for phosphate rights increases this week by €12 to €224 per right, with a wide bandwidth. The quotes vary from €220 to €229. Compared to previous weeks, sellers no longer want to offer lower than €220 per right and use that as the lower limit. 

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Since June, the price of phosphate rights has consistently been above €200 per right. 

Gambling on a wet autumn
For the time being, dairy farmers are betting that roughage extraction will occur in the autumn, despite the drought. Since stocks from previous years are sometimes still on the shelf, this would mean that there would be no need to cut back on the livestock. In surrounding countries (like Germany and Denmark) this already happens, as slaughter figures show. Although it must be said that there is no precipitation in the air for the time being. 

The price development can be seen as a signal that many dairy farmers want to continue milking, but do not yet have their phosphate balance in order. At least, that is the assessment that traders and commission agents have. This strengthens the position of selling parties. Also Rabobank expressed this expectation. Information and calculations are currently taking place in many places, although dairy farmers are sometimes reluctant to conclude transactions.