Analysis Dairy Cattle Index
Dairy cattle Index reaches tipping point
The return in dairy farming has remained relatively stable over the past 4 weeks, after a sharp decline in June. At the moment, however, the Countus Dairy Cattle Index is at a tipping point and it remains to be seen which side will be chosen.
The Countus Dairy Cattle Index was at the beginning of the month July at 89,4 points, but has since dropped to 86,1 points. 100 points is the long-term average. Compared to the period around May and June, the past 4 weeks can be said to have been a relatively stable period.
The small drop in yield is partly due to the fact that milk prices last month relatively stable have stayed, while the feed costs just rise again. Also the price for phosphate rights has risen again. In short: revenues remain stable and expenditures increase slightly.
Which direction?
What is striking is the development of the prognosis for the Dairy Cattle Index. Approximately 1 month ago it was expected that the bottom would be reached and that returns on the companies could increase again, but that seems to have changed. The current forecast shows that a further decline is in the offing.
This decrease is partly due to the fact that the quotations for milk fat (such as butter) and the cheese prices have come under further pressure; for example, the butter price dropped to €3.200 per tonne last week.
Kimberly Baker
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