Monthly LTO International comparison of producer prices for milk

Average milk price July € 32.71

The calculated monthly milk prices in August 2020 averaged to € 32.71 per 100 kg of standard milk. An increase of € 0.20 compared to the previous month. Compared to July 2019, the average milk price decreased with € 0.85 or – 2.5 %.

The increase in the average milk price is comparable to the previous month. Although the price difference compared to last year has diminished in recent months, milk prices - at least for most dairy companies - are clearly below the level of 2019. Even with further price increases in the coming months, it seems unlikely that the price difference with 2019 will be made up. It is therefore expected that 2020 milk prices will be lower on average than in 2019.

With the exception of Danone and Savencia, all milk prices remained unchanged or increased in August. The calculated milk prices of Sodiaal and FrieslandCampina rose the most in August, namely by 1.1 and 1.0 euro per 100 kg respectively. The Sodiaal price increase is entirely due to seasonality.

There seems to be relatively little movement in milk prices for September. It is known for some companies that the milk price remains the same. In addition, small price reductions are expected for Lactalis (-0.1), Savencia (-0.2) and FrieslandCampina (-0.2). Price increases have been announced for October by Arla, FrieslandCampina (both +0.5) and Saputo Dairy UK (+0.5 pence per litre or approx. € 0.6/100 kg).

Fonterra released its annual results and final milk price for the 2019/20 season on September 18, 2020. The final milk price (cash pay-out) of 7.19 NZD per kg of milk solids (fat and protein) includes a dividend payment of 0.05 NZD. Converted into euros and per 100 kg standard milk the final milk price of Fonterra corresponds to € 31.38. The 2019/20 milk price was therefore the highest milk price since the record season 2013/14.

For the current season - from June 2020 onwards- the most recent forecast milk price range is 5.90 -6.90 NZD per kg of milk solids. The mid-point of 6.40 NZD equates to € 27.13per 100 kg of standard milk.

The USA Class III milk price fell by no less than € 11.44 per 100 kg standard milk in August, but is still at a relatively high level of € 41.18 per 100 kg standard milk.

Read the full report in the monthly overview.