Raw material value of milk is sprinting

The raw milk value of raw milk (ex-farm, at 4% fat and 3,4% protein), as calculated every month by the IFE (the German Nutrition Economic Institute), has increased by €2,80 to €34,20 in October .100 per 1 kilos. This is the highest level in more than XNUMX year. The value is calculated on the basis of the valorisation of skimmed milk powder and butter.

Skimmed milk powder sought after in China
The rebound, which started in September, is due to the strong price rally of skimmed milk powder. Prices are rising in many parts of the world. This is partly due to the dwindling stocks, flat milk supply and good Chinese demand. Indonesia also imports considerably more. 

In the period between January and September, Chinese imports increased by 30% to 272.000 tons, compared to the same period in 2018. Within Europe, Germany and France in particular benefit, but New Zealand remains by far the largest supplier.

Higher milk prices
Usually, the payout prices to dairy farmers react to the improving commodity value with a delay of a few months. We now see that some dairy processors (FrieslandCampina, Bel Leerdammer and A-ware) to implement the increases. Milk prices are expected to take (further) steps in the last quarter, given that cheese prices are also rising sharply.