News Dairy

FrieslandCampina increases farm gate milk price

April 29, 2024 - Wouter Baan

The dairy market hasn't been particularly positive in recent months. Despite many competitors having already adjusted their prices, FrieslandCampina continues to raise its guaranteed price persistently. This trend persists with the new price for May announced today. 

The cooperative dairy company is increasing the guaranteed price for May by €0.50 to €47.25 per 100 kilograms. In recent months, FrieslandCampina has consistently implemented modest increases. The company has justified these adjustments as corrections to previously underestimated milk prices from reference companies. This reasoning is reiterated with the latest increase.

FrieslandCampina already held the top position in the Milk Price Comparison, and this position is further solidified. The dairy cooperative anticipates stable milk prices at the reference companies in the coming months. This expectation is plausible, especially considering that many Dutch dairy producers did not raise milk prices further in April.

Mixed Blessing
For FrieslandCampina's member dairy farmers, the announced increase is undoubtedly welcome news. This is particularly true given the expensive spring and summer months ahead, with seeding and silage work looming, and the already high cost of dairy farming due to elevated fertilizer prices.

However, it can also be argued that the relatively high guaranteed price is likely a constraint within the dairy company, as was the case in 2023. Nevertheless, the guaranteed price comfortably exceeds the raw material value of milk calculated by DCA Market Intelligence, based on the valorization of Gouda cheese or the combination of skimmed milk powder and butter.

Wouter Baan

Wouter Baan is the editor-in-chief of Farmerbusiness and a market specialist in dairy, pork, and meat at DCA Market Intelligence. He also tracks developments within the agribusiness sector and conducts interviews with CEOs and policymakers.

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