Inside Milk
Arla continues to maintain stable milk price
Traditionally, Arla is one of the first processors to announce their milk price for the new month. No new trend is starting, as the Scandinavian dairy company keeps the payout price stable at this level for the twelfth month in a row.
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Since December 2018, Arla's basic milk price has been between €32 and €33 per 100 kilos. Such a stable period is rare in a historical context. There have been slight fluctuations in recent months due to currency corrections, because the milk price in Europe is reported in British pounds.
For November, the fat and protein price is €3,95 and €4,34 per kilo respectively. This results in a milk price of €32,43 per 100 kilos, with an annual supply of 1 million kilos. This made Arla a 'middle-ranking player' in the Netherlands in the past month, according to the milk price comparator van Boerenbusiness. Including bonuses for VLOG and grazing, the milk price can rise to €34,93 per 100 kilos.
Stable world market
In terms of global milk production, Arla signals a slight increase in Europe and New Zealand. This is offset by lower production in South America. The price of whole milk powder is moving steadily, while the price of skimmed milk powder is steadily gaining ground. The cooperative expects a fixed butter price for the remainder of the fourth quarter, which is in line with the seasonal pattern.
Arla's stable milk price increases the chance that FrieslandCampina will also keep the milk price the same for November. This is because the guaranteed price is based on the Arla milk price for about 10%.