ADDITIONAL REMARKS MILK PRICES OCTOBER 2010
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.
The Belgian dairy Milcobel has increased its milk price by € 0.50. The
calculated milk price in October is € 33.75 per 100 kg.
Alois Müller and Nordmilch have increased their base prices by 1 Euro
per 100 kg. Humana’s milk price remained unchanged compared to previous
The calculated milk price of the Swedish/Danish dairy Arla increased by €
0.96 per 100 kg which led to a price of € 31.94 per kg in October.
The milk price of the Finnish Hämeenlinnan Osuusmeijeri remained unchanged
The calculated milk prices of all French dairies have declined because of
seasonal adjustments. Decline varies between € -0.34
(Bongrain) up to € -3.42 (Sodiaal) compared to September.
- United Kingdom
First Milk’s calculated milk price is € 28.67 for the October period.
Dairy Crest has increased its base milk price by 0.5 pence per litre. The
calculated milk price in October is € 32,79 per 100 kg which includes a
slightly higher GBP exchange rate and seasonal adjustments.
Milk prices of Glanbia and Kerry remained unchanged in October. Milk
prices of the Irish dairies have not been changed since May 2010.
- The Netherlands
The calculated milk price for DOC Kaas rose in October by € 0.91 per 100 kg.
This price will maintain during November.
FrieslandCampina has increased its milk price in October. A € 0.81 rise
results in a calculated milk price of € 36.31 per 100 kg. The milk price
will increase further by € 0.98 per 100 kg in November.
Just before this month’s publication, it was
announced that Granarolo increased its milk price in October. This increase
of € 1.86 per 100 kg will be taken into account with
retroactive effect in next month’s milk price publication.
- New Zealand
Based on 6.90 NZ$ per kg milk solids a comparable milk
price of € 29.71 per 100 kg standard milk is calculated for October.
The seasonal peak in milk volumes has
probably passed begin November when a new record peak for daily milk intakes
was recorded. Conditions are improving for milk output. At the start of the
season, very unfavourable conditions (rain, cold, snow) influenced milk
output. However, circumstances have improved at present. Current milk
production is 3 % higher compared to the similar period in 2009. The
seasonal production is expected to end up by a 1 to 2 % higher level
compared to last year.
Milk production in Australia is following a similar
pattern and currently is approaching the peak of seasonal output. Australia
expects a flat to 1% growth rate for the full production year if conditions
Fonterra recently confirmed the forecast payout for the
2010/11 season to $7.00-7.10 (before retentions). This includes an unchanged
forecast milk price of $6.60 per kgMS, while the distributable profit
remained unchanged at 30 cents. It is expected that the average farmer will
receive $6.90 per kgMS during the current season.
Due to the fact that Fonterra was able to raise its
contract prices as season progressed, the company
increased the Advance Rate Schedule from $4.30 per
kgMS to $ 4.60 per kgMS in
USA Class III milk price increased from $16.26 per hundredweight in
September to $16.94 in October. Only in 2007 and 2008 October milk prices
were higher. Expressed in Euros, the calculated milk price comes down to €
32.15 per 100 kg standard milk.
In October 2010 milk production was 3, 3% higher compared to October 2009.
Presumably, expected growth in production will be limited to 1.3%, because
of higher feed prices. Nonetheless, USDA expects that milk production will
climb to 195.6 billion pounds in 2011, a rise of over 1.4% over this year’s
projected 192.8 billion pound production.
According to the USDA, the all-in milk price is forecasted to average
between $15.95 and $16.85 per cwt next year, which is very near the expected
2010 average of $16.30 to $16.40 per cwt.
Cheese inventories were well above level compared with the past few years
and therefore inconsistent with the high cheese prices of September and
October. In contrast, butter inventories are lower than recent years and
consistent with the high butter prices in October. Nonetheless both butter
and cheese prices went down in November. The decline of butter price was
caused by a strong production recovery in September. Cheese market prices
declined from $1.76/lb half October to $ 1.47 (40/lb
cheddar blocks) end November. The butter market went down as well from
$2.18/lb to $ 1.70 during that period. This price development was noticeable
on the Class III milk market as well, where prices dropped from $16.94 in
October to $15.45/cwt for November and $13.38/cwt. in December.
Although cheese prices have decreased, USDA expects that price improvements
will occur during 2011 due to a continued economic recovery and a modest
milk production growth.
Next year, cheese prices are expected to average $1.530 to $1.620 per pound.
Butter prices appear to have retreated from their peaks earlier in 2010 but
will average around $1.740 per pound for the year. In 2011, a slightly
higher milk production could lower butter prices even further. However,
butter prices will remain high compared to recent years and are expected to
average $1.500 to $1.620 per pound. Export prospects for NDM will likely
strengthen prices in 2011 to $1.185 to $1.255 per pound; up from this year’s
expected $1.155 to $1.175 per pound average. Whey prices are expected to
remain virtually unchanged, averaging 35.5 to 38.5 cents per pound next
| € per 100 kg
1 january 2010
1 december 2010
| Whole milk powder
| Skimmed milk powder
| Whey powder
| Gouda cheese
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
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.