Inside Milk
DCA Dairy Cattle Index dips below 5-year average
The DCA Dairy Cattle Index for the month of July dives again below the 5-year average. The return in the dairy sector suffers from somewhat weaker quotations for butters and milk powders.
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Although the payment prices for raw milk were stable, the underlying values of dairy products determine the trend return calculation of the index. Lower prices for butter and powder and higher prices for feed pushed the index back to 94,9 points at the beginning of August. That is more than 6 points lower than the level of 101,1 at the beginning of July.
Press dairy quotes
There was some pressure on dairy quotations worldwide in July. An increasing supply and slightly disappointing demand caused, for example, the butter quotation to fall from €3.920 to €3.750 per tonne. Skimmed milk powder was €100 per tonne lower and was still worth around €2.410 per tonne at the end of July.
Costs continue to rise
In addition to the lower dairy quotations, feed and manure sales became somewhat more expensive on the cost side. Compound feed prices continued their upward trend in July despite the somewhat stabilized raw material prices. The price for A-brok at the end of July was €28,45 per 100 kilos, €0,45 more than at the beginning of the month. The price for silage maize was stable. The average reported collection contributions for cattle slurry increased from €13,67 at the beginning of July to €14,08 at the end of the month.
Although the milk prices paid out in recent months have been stable to slightly increasing, the decline in the DCA Dairy Cattle Index indicates that the underlying sentiment has weakened somewhat. The declining dairy prices probably make stable milk prices the highest achievable for the time being. In addition, rising costs reduce returns.