The FrieslandCampina guaranteed price for raw milk for June 2014 is €42.00/100kg of milk. The guaranteed price is €1.75 higher than the level of May 2014 (€40.25).

This increase is primarily due to an adjustment to milk price estimates for a number of reference companies in previous months, which were too low.

The protein price in June is €685.60, the fat price is €342.80 and the lactose price is €68.56 per 100kg.

The guaranteed price applies to 100kg of milk with a protein content of 3.47%, a fat content of 4.41% and a lactose content of 4.51% and is exclusive of VAT. The amounts shown apply to an average supply of 600,000kg of milk annually.

The milk price that FrieslandCampina pays its member dairy farmers annually for the milk they supply consists of the guaranteed price, the annual performance payment, the outdoor grazing premium, the special milk flows premium and the issue of fixed member bonds (registered reserves). With effect from 2014, the milk price will be paid on the basis of the protein, fat and lactose content. The protein, fat and lactose content is shown in euros per 100 kilogrammes of milk, and in a ratio of 10:5:1. All amounts are exclusive of VAT.

The guaranteed price is the amount per 100kg of milk that FrieslandCampina is guaranteed to pay to its member dairy farmers monthly. The guaranteed price corresponds with the average annual prices for raw milk, including payments in arrears and any registered reserves of the benchmark companies in Germany, Denmark, the Netherlands and Belgium.

Every month, the guaranteed price is estimated based on the trend in the published milk prices of the benchmark companies. Any adjustment to the estimate of the milk prices can be implemented in a subsequent month. Any annual adjustment of the guaranteed price can be settled at the same time as the annual payment of the performance payment. The guaranteed price applies per 100 kilogrammes of milk, with 3.47% protein, 4.41% fat and 4.51% lactose.

The amount of the performance payment depends on the financial results of FrieslandCampina and the retained earnings policy adopted. Of the net profit of the business, based on the guaranteed price and net of the interest on member bonds, member certificates and profit attributable to participating interests,35% is paid to the member dairy farmers in the form of a performance payment. The performance payment is distributed annually, once the financial statements have been adopted, pro rata to the price of the milk supplied (kilogrammes of protein, fat and lactose). The performance payment is calculated based on the price of the milk supplied in the previous financial year. No account is taken of cooperative schemes, such as the seasonal scheme, the volume-based premium and the partial outdoor grazing premium.