March and April milk price rises indicate EU market optimism

Irish dairy farmers will be interested to see if their co-ops continue to lift prices
March and April milk price rises indicate EU market optimism

For most of these companies, the increases were the result of higher fat and protein valuations. File Picture. 

March and April milk price gains at some of the big EU milk processors indicate “cautious optimism” in the dairy market, according to the ZuivelNL monthly price report published on behalf of the LTO Nederland farmers organisation, in collaboration with EDF (European Dairy Farmers).

The milk price of Arla in Denmark is expected to increase in March by €0.50 per 100 kg at 4.2% fat, 3.4% protein, followed by an increase in April of €1.50. FrieslandCampina in the Netherlands will increase the milk price in March and April, by €0.20 and €0.70 respectively.

The milk price of Milcobel (Belgium) rises sharply in March by €2.10, while the milk price of Saputo in the UK remains unchanged up to and including April.

DMK in Germany will add €0.50 in March and €1 in April.

In Switzerland, Emmi’s calculated milk price is expected to increase in March and April.

According to the ZuivelNL monthly price report, the prospect of being able to open up society again, and moderate milk production growth in Europe, make a major imbalance between supply and demand unlikely in the short term.

Irish dairy farmers will be interested in seeing if their co-ops can continue to lift prices, as the milk supply increases towards the May peak.

According to the ZuivelNL report, the biggest increase in February of the 18 milk buyers they monitor was in the price paid by Glanbia (up €1.07 to €35.98 per 100kg), attributed entirely to higher valuations of fat and protein.

Other “solid risers” were Kerry (up € 1 to €33.45), Saputo (up €0.76), FrieslandCampina (up €0.72), and Dairygold (up € 0.71 to €36).

For most of these companies, the increases were the result of higher fat and protein valuations.

As a result, prices at Glanbia and Dairygold exceeded the February average of €33.98 per 100 kg at 4.2% fat, 3.4% protein. Compared to the 12-month rolling average of €32.90, Glanbia were at €30.56, Kerry at €31.37, and Dairygold at €30.93.

Retail and export demand have continued to offset the impact of Covid-19 on the foodservice sector, said ICOS in its recent market commentary. 

The rollout of vaccination and restocking ahead of the reopening of food service are important market factors, along with fears of a Covid-19 fourth wave.

There are increased trade costs associated with freight and container supply issues, but temporary suspension of US-EU tariffs, and postponing of UK import checks are positives in the short term, according to ICOS.

This week, buoyant global milk prices again defied predictions, with the GDT dairy auction on Tuesday resulting in a 0.3% overall rise in the price index, whereas analysts and futures markets had expected a 2-3% fall after the annual price gain of 38%.

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