Milk Price: Positive data on Italian and European farmgate milk price
After years to forget, in which the price of milk at the barn had fallen to 30 cents/litre (against an average production cost of around 40 cents/litre), since the end of 2016 the milk market has finally recorded positive data, referring in particular to the increase in the value of cream and butter and the increase in exports, with a focus on the cheese sector.
Determined according to quotations that can be freely consulted on the CLAL website dedicated to market analysis, import and export flows, and forecasts on trends in production, stocks, and the price of milk and its derivatives, since 2016-2017 the price of milk at the barn has returned to more satisfactory quotations for producers and consumers.
The farmgate milk price and its impact on the market
Milk price fairness is an essential prerequisite to the survival of the market-from barns to dairies to milk exporters-Italian and beyond. On the domestic market, Coldiretti’s ongoing efforts have contributed to the battle for fair pay for farmers’ work, generating a positive reaction beyond the Alps as well. Behind the price of milk is in fact the hard daily work of large and small companies, families, farms, and breeders: quotations at the barn that are too low are not good for the delicate agrifood production fabric, risking undermining the country’s food autonomy without any real and substantial benefit for retail consumers.
Since December 2016, for calculating the price of raw milk at the farmgate, the tool of indexing has been introduced: the two basic parameters for determining the basic market price are on the one hand the European cost of milk (EU-28), and on the other hand the price of Grana Padano, one of the most important Italian dairy products in terms of domestic consumption and exports. Indexation must then take into account a base price set on a monthly basis, and minimum levels below which the price of raw milk cannot fall.
How the price of milk is defined
The three basic values that help define the milk price are that of raw milk subject to transfer, that of European reference milk (EU-28), and that of Grana Padano (average monthly price of cheese aged at least 9 months, as quoted on the Milan Chamber of Commerce commodities exchange). On this basis, the average milk price to which all suppliers and exporters will have to adjust is determined.
The recovery of the dairy market, which began in 2016 and continued on a positive trend in the following years, looks set to continue in the decade to come, reaffirming the dairy sector’s role as the backbone of the food industry and an invaluable Italian asset. Thanks to a fairer milk price which saw the recognition of the hard work of farmers and the entire supply chain, the milk market recorded values that reached 26 percent of on-farm production out of the total of the entire livestock industry and 12 percent of the industrial turnover of the Italian food sector in 2016, with particular reference to the northern regions.Right in the heart of the Po Valley, where about 70 percent of Italian milk is produced, lies the Dairy Company’s production plant in Roccafranca (BS). Specializing in the creation of fresh, frozen or concentrated milk products with the functional and sensory characteristics of fresh milk, we have significant experience in the international market and a solid reputation for reliability, consistency and quality as suppliers and exporters of milk, cream and milk-based products for industry.
