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Inside Milk

RFC has fastest falling European milk price

3 July 2020 - Jorine Cosse

The European milk prices from the LTO milk price comparison have partly managed to pull themselves out of the negative atmosphere. Unfortunately, this does not apply to the milk prices of FrieslandCampina and two German processors, among others. RFC records the most sharp decline in May.

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Due to the decrease, FrieslandCampina's price drops even further in the comparison. Last month, the processor was still in fifth place with €33,91 per 100 kilos. The price for May was then revised downwards by €1,90 to €32,00, putting the processor in ninth place. The price includes an average grazing supplement of €0,65. A further decrease of €0,50 is planned for June, after which this €0,50 will return in July.

Price drops
Although Hochwald Milch does well in the comparison by rising from place 10 to place 5 with a stable milk price, this does not apply to the other 2 German processors. Both DMK and Müller drop the price by €1,50 to €31,93 and €30,39 respectively. DMK drops 1 place as a result and Müller also loses 1 place. Müller is not making any statements for the coming months. DMK announces that it will drop again in June by €0,50 and that it will leave the price unchanged for July. Both prices include a surcharge for GMO-free animal feed.

The decline at Arla is not exceptional, but it is striking. The price goes down by €1, but is then compensated with a new climate check bonus €1. Almost all dairy farmers receive this bonus. In addition, 25% of the supplying livestock farmers receive a bonus of €1 for the use of GMO-free animal feed.

Furthermore, leaders Granorolo, Sodiaal and Saputo are lowering the price. Granorolo deducts €0,50 from the price without further explanation, Sodiaal makes the same change and Saputo deducts €0,60. This brings the prices to €37,87, €33,34 and €28,08 respectively.

Small pluses
In May there are even several milk prices that rise slightly. Savencia adds a small €0,30 and Diarygold also increases the price by no less than €0,50. The prices are not shocking, by the way. Savencia pays €33,49 per 100 kilos and Dairygold is quoted at €29,30 per 100 kilos of milk.

In addition to the pluses, there are many prices that remain stable from April to May. None of these milk processors give a reason for the stability, nor a forecast for the coming months.

US milk price plummet
The most notable price in the non-European milk monies is the American 'United States Class III'. At the beginning of this year it seemed to be going in the right direction with the price, but that was unfortunately short-lived. The price has now fallen sharply to well below €30. For May, the processor made a drop of $2,10, bringing the price now to $27,64. This makes the price more than €10 lower than the average of €38,29. An increase is expected for June.

The Swiss Emmi is also implementing a significant reduction. The price drops by €1,40 to €49,10. This means that the price does not differ significantly from the average, which is currently trading at €52,99. It is striking that Fonterra adds €0,40. This is due to a higher exchange rate of the NZ dollar against the euro. The Spanish CAPSA FOOD keeps the price the same.

European processors April price difference may Average (12 months)
Granarolo (North) €37,87 - € 0,50 €39,49
value €35,88 = €35,80
Lactalis (Pays de la Loire) €34,50 = €35,04
Danone (Pas de Calais) €34,25 = €34,96
Hochwald Milch eG €33,62 = €33,56
Savencia (Basse Normandy) €33,49 + € 0,30 €34,92
Sodial (Passe de Calais) €33,34 - € 0,50 €35,08
Arla Foods DK €32,53 - € 1,00 €32,68
FrieslandCampina €32,00 - € 1,90 €34,58
DMK Deutsches Milchkontor eG €31,93 - € 1,50 €32,47
Kerry Agribusiness €30,46 = €30,75
Muller (Leppersdorf) €30,39 - € 1,50 €32,28
dairy gold €29,30 + € 0,50 €30,25
glanbia €28,80 = €29,87
Milcobel €28,73 = €31,62
Saputo Dairy UK (Dairy Crest) €28,08 - € 0,60 €32,34
Average milk price €32,20 - € 0,42 €33,48
Other milk processors      
Emmi €49,10 - € 1,40 €52,99
Fonterra €31,44 + € 0,40 €32,31
CAPSA FOOD €31,27 = €31,34
United States Class III €27,64 - € 2,10 €38,29

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