International milk prices soften
Having reached the halfway point of 2014, we are reflecting on a noticeable softening of milk prices since the start of the year.
Looking specifically at June prices, across Europe we see that Friesland Campina raised its Farmgate price for June, while Arla, Denmark held their prices steady.
However Arla has announced a 3.7% cut on their base price for July. It will be interesting to see if changes to FrieslandCampina Farmgate Price occur when they announce their July update later this week. Arla’s Irish Milk Constituent equivalent price of 38.69¢/litre for June is lower than the January price of 39.40¢/litre.
Fonterra’s initial 2014 / 2015 opening forecast price of NZ$7.00 per kg of milk solids is 15% lower than the forecast price that Fonterra was predicting in January 2014 for its end of 2013 / 2014 season pay-out. That said, it should be noted that Fonterra’s opening forecast price for last year was the same as that for this season.
FrieslandCampina – Farmgate milk for Irish milk constituent equivalents is almost a cent per litre lower in June (40.63¢) than it was in January (41.56¢)
Global Dairy Trade Whole Milk Powder (WMP) prices from the 17th June 2014 auction are quoted at US$3,658 tonne. This represents close on 26% drop in prices from the first auction of the year, where WMP was traded at $4,934 per tonne. This is equivalent to over 10¢ / litre of milk price drop.
USA Class III Milk Price when calculated for an Irish milk constituent of 3.9% fat, USA ‘Announced’ Class Milk Prices have fallen for the last three months. However, June’s prices are still 0.9¢ per litre higher than January’s price.
The global IFCN milk price indicator for May is €34.10 per 100kgs of milk (Energy Corrected Milk: 4% fat, 3.3% protein). Compared with Januarys prices of approximately €39.80, this signifies a drop in value of €5.70 per 100kg of energy corrected milk.
Russian Farmgate prices have increased by about four cents per litres since the start of the year. This is partly due to the abolition of key subsidies that has resulted in a shortage of quality milk supply.