FrieslandCampina cuts milk price due to drop in dairy prices

FrieslandCampina has cut its guaranteed price for raw milk for March 2016 to €28.50/100kg of milk.

That’s the equivalent of 27.55c/L in Irish constituents.

This is a decrease of €0.75 compared to December’s guaranteed raw milk price from the Dutch dairy giant which has nearly 14,000 dairy farms supplying milk in the Netherlands, Belgium and Germany.

FrieslandCampina has said that the decrease in the guaranteed price is the result of the expectation that the prices of consumer milk of some of the reference companies in March will drop.

This is caused by decreasing quotations of various dairy products, it says.

The protein price in March 2016 is €465.23, the fat price is €232.62 and the lactose price is €46.52 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.

Source: FrieslandCampina
Source: FrieslandCampina

Earlier this month, farmers supplying the Dutch dairy were paid a total of €14.1m for limiting their milk supply between January 1 and February 11 this year.

FrieslandCampina paid its member dairy farmers a ‘bonus’ of €2.00/kg if they limited supply within this time period.

The temporary measure resulted in a reduction of the milk supply of a total of about 35m kg of milk in the past six weeks.

There was insufficient processing capacity available at the dairy due to a stronger growth in milk supply than FrieslandCampina expected, thus, the measure was needed.

Some 60% of member dairy farmers participated in the arrangement.