Monthly LTO International comparison of producer prices for milk

The LTO International milk price development is published monthly. The review LTO International comparison of producer prices for milk is published annually. As from July 2020 onwards the LTO International milk prices are published on this website.

Average milk price February € 33.98

The calculated monthly milk prices in February 2021 averaged to € 33.98 per 100 kg of standard milk. This is an increase of € 0.21 compared to the previous month. Compared to February 2020, the average milk price decreased by € 0.22 or -0,6%.

As of the January 2021 publication, Capsa’s milk prices have been included in the average milk price from January 2019. As a result, the average milk prices for the calendar years 2020 and 2019 have fallen by approximately € 0.08 and € 0.15 per 100 kg of milk respectively.

Again - and that for the 9th consecutive month - the average milk price has risen. Since May 2020, the average milk price has increased by € 1.80 per 100 kg (+5.6%). The biggest increase in February compared to January is the calculated milk price of Glanbia (+€ 1.07). This is entirely due to the higher valuation of fat and protein in February and would have been higher if the seasonal supplementary payment had not been reduced. Other solid risers are Kerry (+€ 1.00), Saputo (+€ 0.76), FrieslandCampina (+€ 0.72) and Dairygold (+€ 0.71). For most of these companies, the increases are the result of a higher fat and protein valuation and, in the case of FrieslandCampina, also a higher price for lactose. This is not the case for Saputo, as the calculated milk price for this company only increased due to a currency effect, while the local milk price in fact remained stable.

Of all dairy companies included in the average, the German Hochwald showed the largest drop in February (-€ 1.00). However, the calculated milk price of the Swiss Emmi, which is not included in the general average, showed by far the largest decrease in February (-€ 3.59). This decrease was mainly related to a seasonal deduction, which became applicable in February.

In the United States, the Class III milk price had to take the same step back in February after the modest rise in January, bringing it back to the level of December. The decrease in the calculated milk price in euros was partly limited by a slightly stronger dollar exchange rate in February. Signals from New Zealand remain positive. At the beginning of March, Fonterra again announced an upward adjustment of the milk price forecast for the current season, which amounted to a plus of approximately € 1.82 euros per 100 kg of standard milk.

In the meantime, the market development gives rise to cautious optimism with regard to price developments for the coming period. On the one hand, after a year with Covid-19 pandemic, the prospect of being able to open up society again is slowly but surely improving in many places, which may further stimulate demand. On the other hand the moderate milk production development in Europe does not give rise to expecting a major imbalance between supply and demand in the short term. However, how all this will ultimately translate into milk price developments for the coming period remains difficult to estimate.

The first signals from the dairy companies however are predominantly, cautiously, positive. For example, the milk price of Arla is expected to increase a little in March (+€ 0.5) and then increase further in April (+€ 1.5). FrieslandCampina also shows a plus for March and April of € 0.2 and € 0.7 respectively. The milk price of Milcobel rises sharply in March by € 2.10, while the milk price of Saputo remains unchanged up to and including April. DMK will see a price recovery in March to the level of January (+€ 0.5) and the upward trend is expected to be continued in April (+€ 1.0). Also Emmi’s calculated milk price is expected to increase further in March and April, compared to February. For this dairy company, the seasonal deduction applicable from February reduces the absolute level of the calculated milk price.

Read the full report in the monthly overview.