Second consecutive milk price drop for FrieslandCampina suppliers

FrieslandCampina has cut its milk price for April supplies by €1.00, bringing April’s guaranteed raw milk price to €27.50/100kg of milk.

In Irish constituents this is the equivalent of 26.58c/L. Last month the Dutch dairy also cut its price, by €0.75, to €28.50.

FrieslandCampina has said that the decrease in the guaranteed price is the result of a negative correction of 0.22 euro to compensate for the February forecast of the milk prices of the reference companies.

These milk prices were estimated too high and the expectation that the milk prices of the reference companies will continue to drop in April, according to the dairy.

It attributes this to the low level of foil cheese prices combined with sluggish demand and an increasing supply of milk.

The protein price in April 2016 is €448.91, the fat price is €224.45 and the lactose price is €44.89/100 kg.

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.

FrieslandCampina

Earlier this year, 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.