"Spot" prices for milk - early indicators of supply development

Bright spots for milk prices?

The mutually reinforcing cyclical and seasonal price downturns have resulted in dangerously low milk prices in the first half of 2015. A price recovery in the first months of the year 2015 looming was short-lived, because Chinese imports further remained below the previous year. You must write off probably Russia import in the longer term, because in addition to the lack of political will, especially the financial strength as a result of the weak ruble and of oil price-related depressed income even for replacement sufficient.

On the demand side , still no sufficient sales improvement trend can be seen in the short term. Sufficiently strong impulses can be expected only from China. In the remaining countries of import are improvements to observe, not sufficient but overall, to compensate for China's import failure.

Leaving a significant effect on the supply side has the milk price brake . In 8 world's largest milk producing countries together producing only slightly above last year's level. The trend of declining production is evident. Exception is the United States, achieving average milk prices paid by approximately €32-ct / kg with their above-average butter and cheese prices.

New Zealand's Milchsaison has started again with the month of July. Drastically reduced milk prices to less than €24-ct / kg less cows, and the risk of an EL Niño weather-making drought is expected, that the up to the Oct. 15 from almost zero to 3 million tonnes per month of rising seasonal production in this year steamed fails. Similar expectations one has in Australia, where milk production in the South-Eastern part is focusing on.

The milk market in the EU is characterised by the production side by a currently only marginally above the previous generation. The abolition of the quota brake was hardly noticeable. Even stronger was the price brake and not least, the scarce basic food supply as a result of insufficient rainfall in many parts of Europe. This will be basically no different even for the upcoming summer / autumn period.

Early indicators are spot prices for milk, which are negotiated between the dairies as a result of excess or false needs for the development of the supply situation. Such prices are Holland for the excess area and published the grant region in Upper Italy. Italian spot prices have recovered from their low phase in April/May 15 to approximately €36-ct / kg in the Jul/Aug-15. The average milk prices in Italy is versorgungs - and due to the quality higher, only the clearly rising trend is meaningful.

In the surplus region of Holland , spot prices are by their low phase in the Apr./May-15 with €18-ct / kg at 4.4% fat from dairy with some back and forth again on €24-ct / kg beg. Aug. 15 rose. The courses are still far behind previous years. At least a stabilisation trend is discernible.

For the assessment of other market and price developments, the accumulated stocks in the eye are to keep. Until a noticeable degradation ensures sufficient price travel to top.

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