DCA Dairy Cattle Index continues to climb in May

In week 17, at the beginning of May, the index stood at 100,60 points. In week 21 the index reached 107,10 points. Since the start of the year, the index has now gained 22,50 points. During the early days of the corona pandemic in May last year, the index dipped to around 65 points.

Rising milk prices are the driving force behind recovery, feed is depressed
The main support for the DCA Dairy Cattle Index is the rising milk prices in May. Most milk processors increased their payment prices. This trend is partly supported by the rising value of underlying dairy products such as butter, milk powders and cheese.

Feed prices have a depressing effect on the index. These rose sharply again last month. Prices for standard A chunks increased by €0,50 to €27,35 per 100 kilos.

Outlook moderately positive
The first dairy processors have now published their quotations for June. These show a further increase in milk money. The expectation for the index is therefore positive in the short term. It is generally expected that dairy farmers will benefit from the lifting of corona measures. The demand for dairy from the catering industry will increase, which will ultimately stimulate the milk price. 

However, at this week's international Global Dairy Trade, the various dairy quotes had to give up. The cause of this is not entirely clear, but may be due to an increasing supply of milk in large milk-producing countries such as New Zealand and the United States. In the long term it will become clear whether this can further push down global dairy prices.