Milk prices with upside potential - declining milk delivery The prices for milk and milk products have recently shown a clear upward dynamic. Comparatively little has arrived at the producer level. The milk delivery sinks below the previous year. The Kiel raw material value for milk is calculated from the market revenue from butter and skimmed milk powder with an assumed fat content of 4% and protein content of 3.4%, minus standardized production costs. Although it is not yet directly a question of the producer price, it does provide a basic guide to the direction in which the milk price can go. On average over the years, producer prices follow suit with a time lag. The raw material value calculated for the month of October 2021 is heading towards 45 ct / kg . For November , the order of magnitude of 50 ct / kg is expected to be reached. The increase is largely due to the continued rise in butter and SMP prices. The German producer price was only 36.50 ct / kg in Sep. 21.Rising milk prices have also recently been observed at the EU level. The raw material value with its usual lead time underscores this perspective. On a world level , an upward trend in prices in the dairy sector can be seen in the 14-day results of the Global Dairy Trade auctions . Around 125 wholesalers from all over the world regularly take part in these internet auctions. The results provide a representative cross-section of the international price level. Milk deliveries Milk deliveries in Germany in 2021 will be below the previous year's level. In the last few months the development has given way again. In the Netherlands , the decline in milk deliveries is even more pronounced. On average for the EU countries , milk deliveries to date in 2021 will be at the previous year's level. Recently, however, the quantities have tended to decline.The main reason for the declining production is the rise in concentrate prices, the use of which has been noticeably reduced. In comparison, milk prices have not increased adequately. After high volumes in the first half of 2021 above the previous year's level, milk deliveries in the USA have recently fallen sharply. In the southern hemisphere , the milk quantities in New Zealand and Australia rise sharply until October due to the increasing pasture growth. But the quantities have so far remained around 3.5% below the previous year's level. The world's largest dairy FONTERRA expects maximum prices for milk.
