Inside Milk
DCA Dairy Cattle Index takes a clear step up
The DCA Dairy Cattle Index has shown a clear positive picture for August. The returns of dairy farms benefit from higher quotations for, among other things, milk powder and butter. On the cost side, the prices for feeds seem to be a step ahead...
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Although the prices paid by milk processors have been stable for months, the index lost some ground in July. This was due to the decline in the underlying dairy quotations for milk powder and butter. This decrease had a direct influence on the trend return calculation of the DCA Dairy Cattle Index. However, it has not led to a fall in the milk prices paid out. Now that dairy quotations have risen sharply in recent weeks, rising milk prices are more likely.
Just above average
The index reached a position of 35 points at the end of August (week 103,70). That is a significant improvement compared to the position at the beginning of the month. In week 31, the index was still at a level of 95,70 points. In 4 weeks' time, the indicator for the return in the dairy sector was therefore able to gain 8 points, reaching just an above-average level. It makes clear that despite the increased and relatively high milk prices, the average yield in the sector is certainly not very high; the costs are also high.
Dairy quotes picked up strongly
The driving force behind the increase in the index is the increased prices for butter and skimmed milk powder. The price of butter rose in 4 weeks from €3790 per tonne to €4000 per tonne. An increase of 5,5%. The price of skimmed milk powder made a step from €2420 per tonne in week 31 to €2550 per tonne in week 35. The price increase of skimmed milk powder thus amounted to 5,3%.
After a sharp rise in costs, now quite stable
Concentrate prices have stabilized in August after a continuous 9-month increase. The LEI price for standard beef chunk A stood at €28,45 per 100 kilos in August, which is unchanged from July. Roughage prices were also quite stable. Maize silage was unchanged in price. Pasture hay became €10 per tonne more expensive and amounted to €180 per tonne. The sales costs for cattle slurry did rise considerably. Disposal of manure became almost €1 per cubic meter more expensive and came to an average of €15,00 at the end of August. In the south the costs are a bit higher at €16,00, in the middle a bit lower at around €14,00.