European farm gate milk prices firm

Farm gate milk prices in Europe during August 2013 pushed higher on the back of strong returns for dairy commodities. Dairy farmers in Continental Europe were the main recipents as most French companies raised their prices as did German based companies DMK and Alois, as well as the Belgian dairy company Miclobel. The average price paid for milk by European companies in August was €38.79/100kgs, according to data collated by LTO Nederland. This price is 18.5% up from a year ago, and 8% higher than prices were two seasons ago.   The comparisons done by LTO Nederland show the average European milk price in August was just a tad below the total payout forecast by Fonterra for this season, that is the NZ$8.62/kgMS combined milk price and dividend forecast.   LTO Nederlands have calculated that a payout of NZ$8.62/kgMS equates to €38.97/100kg.   However if you take into account the fact that milk produced in New Zealand has a much higher milksolids content than that produced in Europe, then NZ farmers are actually being paid considerably more than their European counterparts.  This is a situation that rarely arises, only occuring when global dairy commodity prices are extremely high. Further price rises are expected in the LTO Nederland price series as some companies announced further increases to farm gate milk prices during September. However beyond that period we may start to see some easing in returns at the farm gate.  Dairy commodity prices are generally retreating within the European markets and the latest GlobalDairyTrade result may indicate global dairy commodity prices have now also peaked.   Earlier this month the Ulster Farmers Union (UFU) Milk Indicator Price fell by 0.25 pence per litre (ppl) to 33.56ppl.  The UFU Milk Indicator Price is calculated from bot