Dairy farmer's return exceeds expectations

However, that does not mean that the return is worthwhile. The DCA Dairy Cattle Index scores for September with an average of approximately 86 points, considerably lower than the 10-year average of 100 points. From week 36 (first week of September) to week 38, the return in the index took a significant step from 83,7 points to 86,2 points. A week later it was dropped by 0,2 points, only to end the month with 40 points in week 86,2.

Course
The final position in week 40 is in line with the expectations from the DCA Dairy Cattle Index, but the index shows a different trend than expected. Last month we already reported that the suspension of the feeding measure probably contributed to this. However, there are more developments that have been somewhat positive for dairy farmers in recent weeks.

This is what the milk prices finally set a steady course upwards. Almost all processors have increased the milk payment for the month of September and also for the month of October compared to August. Also the compound feed price indicator shows a favorable picture with regard to the compound feed price. As it now appears, this will continue to develop stable in the coming months compared to the multi-year average. Since this average is lower than the current price level, this is a positive outlook.

Expectation pattern
Now that autumn has arrived, the expensive harvest season is almost over. The last corn plots are expected to be chopped next week, there may be another cut of grass, but this is probably not an issue in many places. The fact that the dairy farmer is given some breathing space in terms of costs seems to improve returns. The index is expected to continue to recover through early 2021, reaching a high of 89,5 points in week 4 of the new year.

However, there may still be some obstacles along the way in the form of measures and price fluctuations that could influence returns. Roughage prices are relatively high and the prospects are not yet very favorable. The positive counterpart is that most livestock farmers do not need to purchase feed at this time of year as the harvest season has only just ended.

There are also still possible measures looming regarding the nitrogen crisis, which have still not materialized. Just last week, Minister Schouten was asked by fellow MPs why she has not yet achieved her promised nitrogen reduction. None of the measures she promised to implement have yet been implemented. So we will probably have to wait for the next package of measures.