Find out why European dairy farmers are thrilled about record-high milk prices in June 2024. How will this affect their farm’s earnings? Read more.
Summary: European dairy farmers are seeing record-high milk prices in June 2024, largely due to increased valuations of fat and protein in milk. This price spike provides a boost to the industry, yet variations in milk supply growth across different regions present unique challenges and opportunities. Continuous monitoring of these trends will be vital for understanding their broader impact on the dairy sector.
Average milk price in Europe reached 44.73 euros per 100 kg in June 2024, the year’s highest.
The increased milk price is primarily due to the higher valuation of fat and protein in the milk.
Milk prices have remained stable, fluctuating around 44 euros per 100 kg since January 2024.
Milk supply in Europe grew by 0.8% in May 2024, with Poland leading the growth at 4%.
Germany also saw an increase in milk supply, while Ireland experienced a smaller decrease.
Contrarily, milk production in the Netherlands fell by more than 2% in June 2024, with a 1.4% decrease in the first half of the year compared to 2023.
European dairy farmers are rejoicing as milk prices in June 2024 hit an all-time high with an average price of 44.73 euros per 100 kg of milk, marking the highest price recorded this year. The increase, attributed to higher valuations of fat and protein content, saw a rise of 0.65 cents since the beginning of the year and reflects unparalleled stability in milk prices.
The average milk price saw an increase of 0.65 cents from the previous month. Compared to June 2023, the current price is now 2.34 euros higher, according to the milk price comparison by EDF and DairyNL. This rise in prices is a significant boost for dairy farmers across Europe.
The stability of European milk prices has been notable this year. Dairy enterprises started 2024 with a milk price of 43.64 euros per 100 kg of milk. Since then, prices have hovered around 44 euros per 100 kg. The increase in milk prices is primarily due to the higher appreciation of fat and protein content in the milk. However, French and Spanish dairies have kept their prices stable or have seen slight decreases.
Poland continues to lead in milk supply growth, with a 4% increase in May. German dairy farmers have also increased their milk supply. In contrast, Ireland’s milk supply has been lagging, although the decline has been less severe in recent months. Overall, the total milk supply in Europe increased by 1.1% in the first five months of 2024.
The Netherlands presents a different picture, with a decrease in milk supply accelerating slightly. In June, the country saw a decline of more than 2%. For the first half of the year, the Netherlands produced 1.4% less milk compared to the same period last year.
The record-high milk prices in June 2024 bring a wave of optimism for European dairy farmers. The increase in prices, driven by higher fat and protein valuations, offers a much-needed boost to the industry. However, regional disparities in milk supply growth highlight the varying challenges and opportunities across Europe. As the year progresses, it will be crucial to monitor these trends and their impact on the dairy sector.
Find out how global food prices changed in June 2024: Dairy and vegetable oil prices went up, while cereal prices dropped. How could this affect your grocery shopping and food options? Read more.
A pressing issue is food costs; some encouraging news comes from the FAO Food Price Index (FFPI) for June 2024. After three months of increasing rates, it remained consistent at 120.6 points, much-needed steadiness. What is underlying these figures? Vegetable oil, sugar, and dairy goods all showed gains in June; they helped to offset declining grain prices. Meat costs remained constant.
The FAO Food Price Index: A Beacon of Stability Amid Global Shifts
The FAO Food Price Index (FFPI) reached 120.6 points in June 2024, unchanged from May. However, it is 2.1% below a year ago. It is down 24.8%, showing a return to more stable global food prices even if it stabilized after hitting 160.3 points in March 2022.
A Deep Dive into the FAO Cereal Price Index’s Pivotal June Decline
Cereal
June 2023 Price (points)
May 2024 Price (points)
June 2024 Price (points)
Global Cereal Index
126.6
118.6
115.2
Maize
130.8
122.1
118.4
Barley
120.5
112.3
107.8
Sorghum
128.2
120.6
116.1
The FAO Cereal Price Index dropped to 115.2 points in June, indicating significant global market shifts. Northern hemisphere seasonal harvest pressures drove supply higher, naturally lowering prices. Better production forecasts also raised global supply estimates in Kazakhstan and Ukraine.
Meanwhile, Türkiye’s temporary import restriction on grains reduced global demand and thus affected prices. Improving harvests in Argentina and Brazil and more than projected maize plantings in the United States further drove down maize prices. Prices for barley and sorghum also dropped.
This FAO Cereal Price Index drop combines policy-driven, seasonal, and regional elements. Knowing these clarifies the swings in the global grain market and emphasizes the need to keep an eye on local and international events.
Unpacking the Surge: Key Drivers Behind the FAO Vegetable Oil Price Index Rise
Month
Vegetable Oil Price Index
Change (%)
Key Drivers
March 2023
126.0
–
Baseline
April 2023
128.0
1.6%
Increased palm oil demand
May 2023
128.6
0.5%
Stable rapeseed oil prices
June 2023
131.8
3.1%
Strong biofuel sector demand, declining Black Sea export availabilities
In June, the FAO Vegetable Oil Price Index registered 131.8 points. Rising costs for palm, soy, and sunflower oils were the main forces behind this. Global import demand helped palm oil prices recover. Strong biofuel demand drove soy and sunflower oil prices down, decreasing Black Sea area exports. Prices for rapeseed oil were steady, unlike those of the others.
A Closer Look at the FAO Dairy Price Index’s Impressive June Growth
Month
Dairy Price Index
July 2023
119.8
August 2023
120.5
September 2023
121.3
October 2023
122.4
November 2023
123.1
December 2023
124.0
January 2024
125.2
February 2024
126.0
March 2024
126.4
April 2024
126.7
May 2024
126.9
June 2024
127.8
June saw the FAO Dairy Price Index rise to 127.8 points, a 1.2% increase over May. Worldwide solid demand and limited stockpiles in Oceania drove international butter prices to reach a 24-month high and mostly climb. While whole milk powder only changed little, steady shipments from Eastern Asia also helped to drive skim milk powder costs.
Fascinatingly, a slowing down in world import demand caused cheese prices to drop even as these dairy sectors grew gradually.
Navigating the Meat Market: Stability and Shifts in the FAO Meat Price Index
Meat Type
June 2024 Price Index
Change from May 2024
Change from June 2023
Poultry
116.9
Stable
-1.8%
Ovine
Rising
Slight Increase
Significant Increase
Pig Meat
Increase
Slight Increase
Stable
Bovine
Stable
No Change
Stable
In June, the FAO Meat Price Index remained constant at 116.9 points. The abundance of poultry meat reduced costs. Prices for ovine meat shot sky on solid import demand. She was supported by consistent import demand and solid domestic sales in North America, and pig meat prices only marginally increased. Prices for bovine meat stayed the same, showing equitable worldwide demand and supply.
The Bottom Line
With a balancing effort in world food markets, June 2024 kept the FAO Food Price Index at 120.6 points. Rising dairy, sugar, and vegetable oils balance out drops in grain costs. Thanks to better output in certain important nations and good harvests, the FAO Cereal Price Index dropped to 115.2 points. Driven by strong demand and restricted export availability, the FAO Vegetable Oil Price Index climbed to 131.8 points. With the FAO Dairy Price Index rising to 127.8 points—led by strong demand for butter and milk powders—dairy goods continued an upward trend. Reflecting balanced supply and demand in the meat market, the FAO Meat Price Index remained unaltered. These many price swings draw attention to the complexity of the world food market. Policymakers, traders, and stakeholders must keep updated on these developments to make intelligent judgments under evolving market circumstances.
Key Takeaways:
The FAO Food Price Index (FFPI) remained steady at 120.6 points, balancing increases in vegetable oil, sugar, and dairy products with a decrease in cereal prices.
The FFPI is now 2.1% lower than the previous year and 24.8% below its peak in March 2022.
The FAO Cereal Price Index dropped to 115.2 points, a 3.0% decrease from May, contributed by falling prices in all major cereals due to favorable harvest conditions.
The FAO Vegetable Oil Price Index surged to 131.8 points, a 3.1% month-over-month increase, driven by higher palm, soy, and sunflower oil prices.
The FAO Dairy Price Index rose to 127.8 points, marking a 1.2% increase from May, bolstered by record high butter prices and steady demand for milk powders.
The FAO Meat Price Index held steady at 116.9 points, with notable declines in poultry prices and significant increases in ovine meat prices.
Summary:
The FAO Food Price Index (FFPI) for June 2024 showed a steady rise at 120.6 points, indicating a return to more stable global food prices. Vegetable oil, sugar, and dairy goods all showed gains, offseting declining grain prices. Meat costs remained constant, reflecting balanced supply and demand in the meat market. The FAO Cereal Price Index dropped to 115.2 points in June, driven by seasonal harvest pressures in the Northern hemisphere, improved harvests in Argentina and Brazil, and more than projected maize plantings in the United States. The FAI Vegetable Oil Price Index registered 131.8 points, driven by rising costs for palm, soy, and sunflower oils. The FAI Dairy Price Index rose to 127.8 points in June, driven by worldwide demand and limited stockpiles in Oceania. The FAI Meat Price Index remained constant at 116.9 points, with poultry meat reducing costs and ovine meat prices skyrocketing on solid import demand.
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