Dairy Cattle Index sorts for falling milk prices

The return in dairy farming has been under pressure since mid-September, according to the Countus Dairy Cattle Index. The low point seems to have been reached in the meantime, although dairy farmers may experience this differently in practice.

While costs in dairy farming are rising, dairy prices (especially butter) are under pressure. This is reflected in the Countus Dairy Cattle Index, which fell 8 points to 20 points (week 86,3) in the past 44 weeks. The factor 100 serves as the 10-year average.

High manure disposal costs
On the cost side, the DCA collection fees for cattle slurry a slight increase. In the South region, prices are well above €20 per tonne. This is not yet the case in the Central region, although it could happen. Manure prices are expected to remain at a high level in the winter months and may even improve further.  

Also the chunk prices have risen sharply in recent months, as a result of rising raw material prices (wheat and barley). These prices responded to the drought in various production regions. Although due to the drought the availability of roughage limited, this will not yet lead to significant price increases for silage maize and meadow hay.  

Falling milk prices
In addition to rising costs, the Index is negatively impacted by declines in prices in the dairy market. The milk fat quotations (butter and cream) in particular are under pressure, although the bottom has now been reached. This also explains why the forecast is stable.

Since prices usually react with a lag to movements in dairy products, dairy farmers will probably not experience the downward Index on their farms until the coming months. One number of milk prices has started the downward trend from November.

Wouter Job

Wouter Baan is editor-in-chief of Boerenbusiness. He also focuses on dairy, pig and meat markets. He also follows (business) developments within agribusiness and interviews CEOs and policymakers.

w.baan@boerenbusiness. Nl

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