Corona crisis affects milk price Vreugdenhil

The powder producer's basic milk price drops by €1,35 to €33,91 per 100 kilos. This is calculated on the basis of an annual supply of 1 million kilos, with 4,41% fat and 3,47% protein. The fat and protein prices for March are €3 and €6,30 per kilo respectively. Including bonuses and premiums for quality and grazing, the milk price can rise to a maximum of €36,01. 

Insecure times
During the message Addressed to the dairy farmers and stakeholders of the dairy group, CEO Albert de Groot speaks of uncertain times that are turning daily life upside down. The downgrade in milk powder prices will undoubtedly hit the dairy company hard.

The DCA quotation for skimmed milk powder has already fallen by €760 to €1.890 per tonne since the start of the corona crisis in China. Whole milk powder has also fallen significantly in value, which puts pressure on the raw material value of raw milk.

In the meantime, the EDA, which represents the interests of dairy producers, has been asking the European Commission for some time private storage scheme (intervention) for skimmed milk powder. A signal that underlines the negative market sentiment.

Dutch Milk price calculator 
Now that Vreugdenhil's milk price is known, the balance of the milk prices for March are drawn up. The average basic milk price in the Netherlands fell by €0,25 to €33,95 per 100 kilos. The largest reduction is attributable to Vreugdenhil. And given that the processor is largely dependent on the difficult milk powder market, this is not surprising. 

DOC Kaas and Arla even increased the milk price before March, but in terms of payment they score lower than Vreugdenhil. And that qualifies the powder producer's reduction. It is expected that many processors will (further) reduce the milk price in the coming months. The first milk prices for April already show this.