Guaranteed price to lowest level since 2016

The fact that the corona crisis is hitting the milk price hard is apparent from the fact that FrieslandCampina has lowered the guaranteed price for the month of May to the lowest level since 2016.

The member dairy farmers are confronted with a reduction of €2, bringing the guaranteed price to €33 per 100 kilos. We have to go back to November 2016 to find out such a low level. The bare milk price will be €31,66 next month, with an annual supply of 1 million kilos. A PlanetProof participant is still barely €35. 

Including the previous reductions over March and April, the guaranteed price has already had to add €3,50. This amount can be fully attributed to 'corona damage'.

Dairy market still negative
Now that the benefits are declining rapidly, it is a challenge for many dairy farmers to achieve green figures. Because the dairy market has not yet recovered in recent weeks, it is quite possible that milk prices will fall further in the coming months. Based on the valuation of basic dairy products, it is likely that the €30 limit will be passed.

Milk price Arla
The Scandinavian Arla has also reduced the milk price for the month of May, but is less negative than FrieslandCampina. They lower the basic milk price by just €1 to €32,30. This puts Arla above the Dutch dairy cooperative in the milk price comparator van Boerenbusiness† A unique situation.

Wouter Job

Wouter Baan is Head of Meat & Dairy at BoerenbusinessAt DCA Market Intelligence, he focuses on dairy, pork, and meat markets. He also monitors (business) developments within agribusiness and interviews CEOs and policymakers.

w.baan@boerenbusiness. Nl

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