The milk market has been under pressure for months. The spot market price peaked around €61 in August-September 2022, before falling rapidly to €30 in early February 2023. Improvement seems a long way off given US and New Zealand production growth and a consumer hand keep on the hook.
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The spot market is always about four months ahead of the price paid by the dairies. FrieslandCampina's guaranteed price was around €61 at the end of 2022. It is now €45 and a level of €35 in June is likely. Flynth recently calculated that two out of three dairy farmers need 40 cents to cover costs. That means negative margins for most of 2022. It is no coincidence that Germany is already calling for a price safety net. Big tax bill coming up The fiscal profit for 2022 is high. This leads to a hefty tax bill that will land on your doorstep in mid-2023. Accountants foresee that many livestock farmers will then have to go to the bank to pay the assessment. There has been insufficient anticipation and reservation. That picture also emerges from the survey that Melkvee100Plus conducted among readers. Only a third of them have a good idea of the size of the attack, less than half have reserved for it. That high attack is difficult, but surmountable. Worse is that expansion elsewhere in ...
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