Bloomberg News

European Union November Milk Prices Rose 6%, LTO Reports

January 06, 2012

(Updates to add FAO dairy-price index in third paragraph, LTO comment in fourth.)

Jan. 6 (Bloomberg) -- European Union cow’s milk prices rose in November as dairies in the U.K. and the Netherlands paid more to suppliers, farm organization LTO-Nederland said.

The average milk price EU dairies paid farmers in November was 35.59 euros ($45.31) per 100 kilograms (220 pounds), up 6 percent from 33.56 euros a year earlier, farm organization LTO- Nederland wrote in its monthly online milk-price report. The average price climbed from 35.48 euros in October.

The dairy-price index tracked by the United Nations’ Food and Agriculture Organization fell for a fifth month in November to the lowest level in more than a year. Dairy demand in China and Russia fell in the second half of 2011, and the market is “cautious” as global supply increases, according to LTO.

“Anxiety that the continuous financial and economic turmoil will put sales perspectives on the dairy market under pressure has led to an uncertain sentiment,” LTO said. “The most important question is whether demand can keep up with the relatively high global growth in milk production.”

Milk-powder prices were stable in the last quarter of 2011, while butter prices declined, according to LTO.

“Growth in milk production in Oceania, Europe and the U.S. might become a leading factor for price levels in 2012,” LTO wrote in the report. “Because of lower domestic demand in the last two mentioned regions, there will be more milk available for export.”

In the U.K., Dairy Crest Group Plc raised prices, while Royal Friesland Campina NV in the Netherlands also paid more in November, according to LTO.

--Editors: Sharon Lindores, Claudia Carpenter

To contact the reporter on this story: Rudy Ruitenberg in Paris at rruitenberg@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net


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