ADDITIONAL REMARKS MILK PRICES OCTOBER 2010

MILK PRICES

The average calculated milk price for October 2010 deliveries is € 32.98 per 100 kg standard milk. This means a decrease of € 0.08 per 100 kg compared to the previous month. The average European milk price of October is € 5.77 higher, which represents a 21.2% increase compared to last year.

MARKET SITUATION

Dutch Quotations
€ per 100 kg
1 january 2010 1 december 2010 index trend
 
Butter 315 361 114,6
Whole milk powder 252 269 106,7
Skimmed milk powder 203 209 103,0
Whey powder 70 69 98,5
Gouda cheese ± 290 ± 320 106,9

 

In the Netherlands milk output during January-October 2010 was 9.53 billion kg or app. 2.9% higher compared to the same period last year. The average milk fat and protein percentage during this period was 4.38% and 3.5%, being slightly higher compared to last year.

According to recent provisional figures, milk output in the EU-27 for the period January-August of 2010 was 0.4% higher compared to same period last year. Recently, milk production in Europe has passed the seasonal low levels and production has started to rise again since mid November. During this year’s autumn, milk deliveries were higher than usual.

September milk production in the EU was 4.5% ahead of last year. For the October- November period output is projected to be strong compared to last year. Especially in France (October and November +8%) and Germany (October and November +3, 5%).

In October, market sentiment deteriorated because of a higher milk production output and lack of external demand. This reflected in the steep decline of milk powder prices. Also the butter market was confronted with downward price pressures. However, the combination of lower price levels and a higher US dollar exchange rate made the EU more competitive and buyer interest increased from both domestic and international side.

Milk supply is still growing in all export regions. Until now, most international prices sustained and probably will until the end of the year, but the market is less certain beyond that period.

Price determinant factors for the near future are the milk production on the Southern Hemisphere (predominantly New Zealand) and demand from importing countries like Russia and China.