The top of the milk price is 40 euro and a bit

The rise in milk prices is over for the time being. FrieslandCampina has taken back the quarter that was still added to the milk price in April in May. Presumably, other processors will also not implement any further increases for now. For dairy farmers, this means that in their liquidity forecasts they should for the time being take into account a milk price of about €40 per 100 kilos. After the milk price found a floor around €38 in March following a historically sharp decline, the payout prices managed to recover in the months that followed to above the psychological threshold of €40. A four for the milk price may look friendlier, but the current level is insufficient for many dairy farmers to fully absorb the rising costs. Higher costsCompound feed prices have gradually continued to rise in recent months. Added to this are high diesel costs during field work, while variable interest rates have also risen. Meanwhile, cattle quotations are moving down somewhat again, although slaughter prices are still historically at an attractive level. After several financially strong years, 2026 threatens to be a financially weaker year for many dairy farmers, unless the market still shows a clear turnaround in the second half of the year. The question is where that momentum should come from. Milk supply remains historically high in Europe, while dairy farmers in the United States and New Zealand are also keeping supply high, despite milk prices there also being under pressure. High butter stocks, friendly protein side The peak in European milk supply now seems to be behind us, which is also visible in the rising spot milk prices. At the same time, there is still a lot of product in the pipeline that will soon enter the market. The question is whether demand can absorb this well. Traders are speaking of large butter stocks in European cold stores, although exact volumes are difficult to determine. The butter price now seems to have found a floor around €4,000 per ton, but the upward potential appears limited. This also applies, albeit to a slightly lesser extent, to cheese. In addition, purchasing power in Northwest Europe is under pressure because of high energy costs. As the holiday period approaches, cheese consumption also traditionally declines somewhat. The protein side of the market is more favorable. Whey powder prices are at record levels and skimmed milk powder has also risen sharply in value since the turn of the year. However, much of this improvement has already been reflected in the higher milk prices of March, April and May. Moreover, powder prices are no longer rising much further now. Top is at 40 euro Where the milk price moved comfortably around €55 last summer, the raw material value of milk does not allow processors to pay much more than the current level of just over €40 per 100 kilos. With sustainability premiums, that level can still be lifted somewhat.