Milk price: all the numbers to understand the state of the sector and future trends

Milk price: all the numbers to understand the state of the sector and future trends

The milk it is a commodity of primary importance and is, without a doubt, one of the pillars of our economy (read here to understand the advantages and difficulties of the sector)

In this article we examine the numbers and trends analyzed by the European Commission on the world market to understand in which direction the sector is heading.

All the numbers of milk

Prices and trends: how to define them

Before we start looking at the numbers of milk, it is good to make a specific: in this article we will often talk about spot milk, a term that indicates bulk milk in tanks (raw or pasteurized, +4 ° C) and marketed weekly outside of any annual or long-term contract.

For the Lodi Chamber of Commerce, or the body that determines the price and listing of spot milk in Italy, the figures are constantly increasing and have reached the average of € 44.33 per 100 liters in mid-October.

The Lodi Chamber of Commerce is the reference point for milk prices in Italy

The price it is one of the data to always keep in mind when you want to predict the trends that will influence the future of the milk world.

These, being a global market, are many and not all directly connected to the world of agriculture (see, for example, the price of oil and energy in general, essential elements for the production and transformation process of milk. ).

Price of milk in the European Union

The situation in the dairy and dairy world is constantly kept under control by European Commission.

The factors that are taken into consideration are the following and the data presented date back to August 2018:

  • The average price of milk stable in the countries of the European Union is € 33.60 per 100 kg; this figure is the only one recorded on the rise (+ 2.2%)
  • The average price of butter is € 510 per 100 kg (-6.4%)
  • The average price of skimmed milkor is € 156 per 100 kg (-2.1%)
  • The price of whole milk is € 276 per 100 kg (-1.5%)
  • The average price of cheddar is € 335 per 100 kg (-0.7%)

Price of butter in America and Oceania

Among the markets to keep under control with regard to milk prices, they cannot be missing the American one and the one relating to Australia and New Zealand, major players in this sector both from the production side and from those of imports and exports.

The data collected speak for themselves: when dealing with milk, butter and cheddar European prices are always higher than American and ocean prices.

If, for example, butter in Oceania and America has a dollar / ton ratio that is between 4,000 and 5,000 dollars, in Europe it exceeds 6000 dollars.

Butter has a decidedly higher cost in European countries, but the trend seems to be towards a global cost adjustment

The trend, however, seems to be moving towards a general alignment of prices.

Price of milk in the world

The trend towards alignment is also recorded when we talk about milk.

The initial gap of the early 2000s only replicated itself in 2014, and then realigned after 2015, the year in which milk quotas in Europe were eliminated.

But what are the milk quotas?

Introduced in 1984, milk quotas they were a limit applied to the production of milk that every farmer had to respect; when this limit was exceeded, a tax called additional levy was applied, which took the form of a financial levy for each kilogram of extra milk produced.

The purpose of this mechanism was to protect the milk production itself, avoiding that it becomes excessive and that the surplus leads to a loss of profit for farmers.

Milk quotas were abolished in 2015 across Europe

Abolished in April 2015, milk quotas are no longer applied and the whole European Union has returned to the free market.

It's Italy?

As we said at the beginning, Italy is a great protagonist of the dairy and dairy market.

According to data collected by CLAL, last year Italy covered 8.2% of milk deliveries in Europe, exported 29.1% of dairy products and, again with regard to 2017, accounted for 4.7% of total European exports.

As for the national territory, however, they were produced 12,071,437 tons of milk; also at a European level, production reached good figures, recording a growth of 1.7% in the first half of 2018 (here you can find an in-depth analysis on the best cattle breeds for milk production)

As for the prices of national spot raw milk, the Piazza di Lodi records as its latest figure (as of 22 October 2018) a minimum cost of € 43.82 and a maximum of € 45.36 per 100 liters.

Gianni Morandi sang "Let your mother send you to get the milk" and we, as good farmers, could not help but encourage this practice.

Do you think the information in this article is incomplete or inaccurate? Send us a report to help us improve!

Video: Future of Dairy: Overview of Production Method u0026 Market