Price of sausage cow in Germany drops sharply

Over the past two weeks, the VEZG price (O-quality) fell by 20 cents. This is the lowest quality listed in Germany and represents the dairy cow segment. This represents a decline of 3,1%. The most recent price movement was particularly notable: the price dropped by 15 cents to €6,15 per kilo. Meanwhile, the higher R-quality remained stable.

The lower price of dairy cows is the result of the decline in milk prices in recent months. The DCA Milk Price Index shows that the average basic price for milk fell by 5,3% between June and October, to €51,77. Milk prices are also falling rapidly in Germany. Meanwhile, the spot price in week 42 is a full 40,1% below the basic price, at a level of €31. This strongly indicates that demand for milk is weak and will continue to decline for the foreseeable future.

Market insiders say the decline is due to a surplus of beef trimmings. Several players have significantly lowered prices to sell more product. Because the trimmings primarily come from a larger dairy herd, there's a surplus of lean trimmings. However, there's still a shortage of fat trimmings.

Due to the drop in milk prices, more and more dairy farmers are choosing to slaughter and replace less productive cattle. Slaughterhouses indicate that this process is already underway in the Netherlands. However, this is not yet reflected in the quotations from Vee & Logistiek. Prices remain stable across the board, even for qualities between second-worst quality and O-quality. With the significant reductions in Germany, it seems inevitable that slaughter prices for dairy cows in the Netherlands will also decline shortly.