What is the return of dairy farmers in 2019?

The return on dairy farms in the Netherlands has been below average throughout the year, according to the Countus Dairy Cattle Index. It is also expected that this will remain the case for the time being.

Various dairy processors have adjusted milk prices from the second quarter. The average milk price van Boerenbusiness decreased by approximately €0,25 per March to €34,02 per 100 kilos (at 4,41% fat, 3,47% protein and an annual supply of 800.000 kilos).

While further corrections are not obvious, increases are not in sight either. For example, by mid-June, both the milk fat quotations (butter and cream) and the cheese prices under pressure. The value of the protein has been on the rise again in recent weeks, but seems to have reached a ceiling.

Prognosis: no prospect of improvement
The movement of the Countus Dairy Cattle Index shows that the return in dairy farming has been moving below the long-term average for months now. In recent weeks, the Index has fluctuated between 90 and 95 points. The forecast also foresees that it will remain in this bandwidth until week 50.

In the coming months, however, the prices of dairy products could improve to such an extent that higher milk prices will still be within reach. In short: it is still too early to conclude that returns in dairy farming will remain lower in the second half of 2019. This does not alter the fact that this is a realistic scenario.

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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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