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FrieslandCampina significantly reduces milk price by 7 euros
FrieslandCampina is lowering its guaranteed price for November by €7,00 per 100 kilos of milk. This is the largest single-month milk price reduction in the last ten years. A similar increase is also unknown. FrieslandCampina is leading the way with this measure. Other dairy companies in the Benelux have not yet implemented similar reductions.
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With the reduction, the guaranteed price for November will be €46,00 per 100 kilos, compared to €53,00 per 100 kilos in October. FrieslandCampina indicates it expects to be more than just a major milk price reduction. "The decrease (in the guaranteed price) is primarily driven by the expectation that the reference companies will reduce their compensation for conventional farm milk, in line with the recent sharp drop in prices for basic dairy products," the company reports. However, the reduction has another effect, as "the decrease is also attributable to a negative correction due to an overestimation of the reference prices for farm milk in the past period."
The basic milk price for conventional milk in the Netherlands with an annual supply of 1 million kilos comes to €45,16 per 100 with the reduction, as shown by the Boerenbusiness common milk price comparatorIn Belgium, the current milk price will be reduced by €6,81 per 100 liters to €43,82, based on an annual supply of 1,3 million liters.
Meanwhile, the organic milk price for the Netherlands will increase slightly. 75 cents will be added, bringing the organic guaranteed price to €68,50 per 100 kilos, while the base price for organic milk, including seasonal surcharge, will be €72,43 per 100 kilos.
According to FrieslandCampina, the increase in the organic milk price is based on the expectation that the reference companies will keep their prices in line with the stable market trends for organic dairy. Furthermore, the increase is the result of an upward correction due to an underestimation of the reference prices in the previous period.