Milk Price

Why is the pricing of milk important?

The milk price is important for the farmers in our society. They are always looking for the perfect price. By researching properly what the milk price is and the possibilities to produce it, they can save as much as possible on the milk price. A famer usually gets more out of sustainably produced milk. The extra money they can use again to make their company even more sustainable.

But it is also important to the consumer in the store to see what happens to these prices. The consumer eventually has to pay more or less for the same product. Because this information is shared publicly on the internet, they can make a fair choice. We can all contribute to a better society. This we can do by paying a fair price for our milk.

What are the advantages to know this?

The biggest advantage to knowing the milk price is that the supplier has to pay a good price too. We can see this by checking out the average price they share. They do not want to lose customers by giving a too low price, but they also do not want to pay too much for a product they can sell a lot of. It is important to find the right balance.

Do not instantly go for the highest price, because it can also come with high transport costs. Eventually the farmers have to make the most money at the bottom line. For farmers this could be a reason to up production or downscale. This way they do not make too much loss. It is only a measly amount they get for the hard work they do.

What is the milk price based on?

The milk price is determined by a number of data. It is important how the sale of milk happens. A lot of farmers are member of a union that determines the price with buyers of dairy. Big players like Campina for example, that buy pretty often. Since the second world war, farmers are not allowed to sell milk directly to the consumer. A company has to be in between before the milk goes to the consumer and that impacts the price of milk.

Determining the right milk price

To determine a good milk price, we have to keep into account the way that this is produced. There are many more biological variants that cash in more. But of course it does mean that usually the costs to produce are also higher. The biological products of the biological farmers at the bottom line do make more money though. Companies also have influence on the price, they are at the negotiation table as well.

When there is little milk or few milk products are sold, a lower price of milk can be the result. We have noticed this a lot during the corona pandemic. But the price is going back up and we are hoping to see more of this good upward trend.

Gaining more from the same product

By producing biologically, farmers can get more out of their milk price. Biological products take up more shelf spaces in the supermarket every day, in comparison to “normal” products. It is also a fact that there are more and more biological stores where they can deliver this product to directly. The biggest advantage of direct delivery to a biological store is that the milk price is much higher there. Thsi is because they also agree that farmers deserve a fair price.

It is so that these stores require less milk though and have less sale.s It is important to find out for a farmer, how much they produce and what remains. If both numbers are accounted for, the average price a farmer gets is produced.

Who benefits from the milk price?

Especially famers benefit from the milk price. They produce 9 out of 10 times the milk or dairy products. IT is important that they can get a fair and good price for their products. More farmers have left their lands behind because it is not realistic to maintain it. Many farmers have trouble with political decisions and laws and rules and only see their bottom line diminish.

What can we do with the milk price?

Based on the milk price, we can see if the milk in the stores will become more expensive. But companies can use it to derive different information. They can see if a lot of milk is being exported or not and if it wise to invest in it or not. Next to that it also gives a good indication of supply and demand in these kinds of product. The less supply there is, the more the milk is worth. But if we have a high over supply, the price will drop instantly. We saw this at the beginning of the corona pandemic. Luckily it is getting back on its feet now.

A short summary of this article

Determining the milk price is not only done by farmers. Often it is determined by a union where companies and dairy farmers negotiate together. Depending on the area this can be done a number of times per month. It is also a question of how much consumers consumer milk and dairy products at that moment in time. It could be that the farmer gets more money in the winter than in the summer months, or vice versa.