Dutch milk prices appear to be on the rise

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Dutch dairy company Friesland Campina has increased its milk price for February. 

The cooperative said the rise of €1.25/100kg (equivalent to 0.9ppl) was the result of improved prices for butter, milk powders and foil cheeses.

In addition, export prospects have been improved by the weak Euro.

Provided price increases continue, DairyCo would expect there to be a knock-on effect on UK markets.

Dairy farmers in the Netherlands have seen milk prices fall by around one third over the past year, the largest drop of the main milk producing countries in Europe, resulting from its high level of exposure to global markets. The recent improvements in commodity markets, as witnessed from recent GDT results, now seem to be feeding through to Dutch farmgate prices.

Meanwhile, world wholesale prices generally trended lower between December and January. US prices reduced to become more competitive on the world market. EU prices fell post-holidays before increasing somewhat towards the end of the month. Oceania prices saw some increases due to reducing milk production and strengthening export demand.

US butter prices continued to fall this month, although to more competitive levels, down 17.9% to $3,447/tonne. Production has been increasing with more cream available and as prices became more competitive, export demand began to increase. EU butter prices fell, on average, 6% in January. At the start of the month domestic and export demand was flat post-holidays. However, a weakening Euro allowed for prices to become more competitive with buyer demand increasing towards the end of the month. Oceania butter prices increased 10.4% to $3,488/tonne. Domestic and export demand are relatively good and production has been seasonally decreasing, supporting prices.

US Skimmed Milk Powder (SMP) prices fell significantly between December and January coming more in-line with the global market, down 18.7% to $2,249/tonne. Demand for US product has been light because of the uncompetitive prices. EU prices for SMP reduced by 6% to $2,144/tonne. A weakening Euro and moderated supply meant that trade activity increased towards the end of the month, up from light trade at the start. Oceania prices increased slightly over the month to $2,406/tonne, up 0.3%. Export demand has been good, which has kept supplies from building too much.

EU Whole Milk Powder (WMP) prices reduced $71/tonne to $2,725/tonne. Prices fell at the start of the month due to low trade, however, prices became stable towards the latter stages with slightly more demand occurring.