Milk prices are now rising much faster than costs

The DCA Dairy Cattle Index reaches 147 points in early December. It means that the index gained about 40 points in ten weeks. Such a strong increase in such a short time has never occurred before in the history of the index. The index is fueled by the continued increase in the various quotations for dairy products.

Finally, increasing returns exceed costs
Although the dairy market has actually been in a positive flow all year (barring breaks), dairy farmers are only now actually reaping the benefits. While the rise of the index was initially mainly driven by the price increase of butter, the price increase of skimmed milk powders has recently also contributed.

Butter prices rose by around €1500 per tonne in just a few months. Prices have recently stabilized at a historically high level. Skimmed milk powder rose in price by around €800 in a few months and has continued to increase cautiously in recent weeks.

In addition to the increased dairy prices, prices for beef cattle are also at very high levels. The supply of animals is tight, measured against the available capacity in Dutch slaughterhouses. That is why a lot of money is paid for cows for slaughter.

Costs also continue to rise
Although prices for roughage have been quite stable in recent months, the costs for compound feed and manure removal increased. The disposal of cattle slurry in week 47 amounts to €17,33 per tonne. The price for standard pellet A for dairy cattle is €29,10 in November, according to the LEI. That is €0,40 per 100 kilos higher than in October. That is the highest level ever.