Inside Milk
No room for higher milk price at Vreugdenhil
Vreugdenhil Dairy Foods keeps the milk price for November equal to that of October. Unlike other processors, the milk powder producer does not follow the rising trend in the fourth quarter.
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The basic milk price at Vreugdenhil (including winter supplement) for October is €35,88 per 100 kilos. This is calculated based on 4,42% fat, 3,57% protein and an annual supply of 1 million kilos. The underlying fat and protein prices have been stable since May at €2,90 and €5,70 per kilo. Between December 2019 and November 2020, the Vreugdenhil milk price averaged €34,87.
Based on the basic payment price for November, the processor is in the lead milk price comparator, but the winter supplement has somewhat clouded the results. Including bonuses and premiums for quality and grazing, the payment price over the past month can amount to €37,98 per 100 kilos. This means that the powder producer must take precedence over A-ware, Cono and FrieslandCampina in the milk price comparator.
Stable powder market
While other processors increased their fat and protein prices this fall, Vreugdenhil did not. Vreugdenhil relies heavily on the milk powder markets, which have been relatively stable for some time. Between weeks 33 (mid-August) and 48, the DCA quotation for skimmed milk powder was predominantly between €2.600 and €2.700 per tonne. Last week the quote broke out at the top of that range. Despite the corona crisis, sentiment for milk protein for 2021 is not bad, partly due to low stocks in the EU and the US.
In addition, the oil price climbed to about €45. The Opec cartel has also agreed to increase production in January less rapidly than previously agreed. This may also put a positive spin on milk powder prices in 2021, because in the past they often correlated with oil.