Analysis DCA Dairy Cattle Index
Dairy cattle Index remains below long-term average
The return in dairy farming is well below the long-term average and there is no prospect of recovery for the time being. This is apparent from the movements of the DCA Dairy Cattle Index. The rising feed costs, among other things, affect the return.
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De DCA Dairy Cattle Index has been moving between 80 and 85 points since the summer, while 100 is the 10-year average. In short: the return in dairy farming is approximately 20% below the long-term average. The index forecast predicts little improvement in the coming months, as a return score of 87 points is expected for the second quarter.
The failing returns are a result of milk prices. The average basic milk price in the Netherlands in December was below €35 per 100 kilos, which is too little for many companies to achieve a decent return. For January, A-ware and FrieslandCampina, among others, have a strong one reduction in the milk price implemented, which even worsened the situation in the short term.
Rapidly rising chunk prices
On the cost side, we see the price of concentrates rising rapidly. Wageningen Economic Research's chunk prices even rose to the highest level since 2013 in December. This was due to higher raw material prices for wheat and soy. The chunk prices will also continue to rise in the first months of 2021, the compound feed indicator of Boerenbusiness. Beer brush is also expensive with prices of approximately €2,90 per percent dry matter.
Today, anyone who has to dispose of manure pays an average of between €17 and €18,50 per cubic meter for cattle slurry. From a historical perspective, this has sometimes been more expensive. It is expected that collection contributions will decrease as spring approaches.
