EU milk price rise slows down
European milk prices increased for the fifth consecutive month in September, but the increase has begun to level off, according to the monitoring by the Dutch LTO farmer organisation of prices paid to farmers by 17 milk processors.
Only a few limited price increases have been announced for October, and in November, most milk prices will remain the same, according to LTO.
FrieslandCampina, the EU’s third biggest dairy, will follow a price increase in October by reducing the milk price in November by €0.70 per 100kg (which the company says is mainly due to pressure on dairy prices).
Dairy Crest in the UK will hold the milk price unchanged for October and November, and has announced a price floor for December and January.
Outside Europe, New Zealand’s Fonterra has lowered the milk price forecast for the current year, but milk prices are rising in the US.
On Tuesday, the Global Dairy Trade (GDT) price index fell 2%.
This included the cheddar price falling 4.6% and the butter index down 1.7%.
But the skim milk powder price index gained 1.2%.
It was the sixth consecutive drop in GDT prices.
In the EU, butter prices are now more than a quarter lower than two months earlier.
However, the sale of a large quantity of intervention skim milk powder in mid-October appears to have created a floor in that market.
European product is still too expensive for the world market, where New Zealand and South America are more competitive.
The milk price trend has stagnated in Europe despite August milk delivery figures showing clear consequences of the summer drought.
In Germany, there was hardly any growth in the milk supply, and the milk volume decreased slightly in France, Italy and the UK.
While there was a striking recovery in Irish milk deliveries, the Dutch milk supply has fallen sharply in August and September as the introduction of phosphate rights bites, forcing many dairy farmers to decrease their number of cows.
Outside Europe, there is still growth in milk production, led by New Zealand’s milk volume in September advancing to 6% ahead of September, 2017.
Volume also increased in Argentina, New Zealand, Uruguay and the US.
But milk production fell for the third month in a row in Australia.
Meanwhile, milk production growth in the US is staying below the long-term annual growth rate of 1.6%, through September.
