Guaranteed prices rises EUR 1.00 in September to EUR 24.50 per 100 kilograms of milk

7 September 2009


Following a sharp fall in the first half of 2009, prices for farm milk stablished in Germany, Denmark, the Netherlands and Belgium at a slightly higher level than expected. As a result, FrieslandCampina’s guaranteed price rose by EUR 1.00 in September to EUR 24.50 per 100 kilograms of milk, exclusive of VAT.

The guaranteed price of FrieslandCampina is the average of the year prices that dairy companies in Germany, Denmark, the Netherlands and Belgium pay on average for raw milk.
This guaranteed price applies to 100 kilograms of milk with 4.41% fat and 3.47% protein and is exclusive of VAT. It is the price that FrieslandCampina guarantees to pay the member-dairy farmers for the milk they deliver in September 2009. This price is independent of the result of the FrieslandCampina company.
This guaranteed price does not include the effects of additional payments and charges, such as the quantum supplement and additional seasonal charges and payments. January, February and July are ‘neutral’ months in terms of seasonal levies and supplements: these are months with no seasonal levies or supplements. From March until the end of June the summer levy is applicable to the members of FrieslandCampina (2.30 euros per 100 kilos of milk). The members receive a seasonal supplement of EUR 3.65 in the period from August to November and EUR 1.00 in December. After settlement of additional payments and charges, the milk price in September for a dairy farm delivering 500,000 kilograms of milk is EUR 27.47 per 100 kilograms of milk, exclusive of VAT.

FrieslandCampina guaranteed price

Per 100 kilo milk 1) Cumulative average per 100 kilo milk 1) Per kilo fat 2) Per kilo protein 3)
September 2009

24.50

25.31

 

2.50

4.80

August 2009

23.50

25.41

 

2.47

4.55

July
2009

23.50

25.68

 

2.35

4,70

June
2009

24.25

26.04

 

2.30

4,98

May
2009

25.25

26.40

 

2.31

5.26

April
2009

25.25

26.69

2.30

5.27

March 2009

25.25

27.17

2.29

5.28

February 2009

27.50

28.13

2.21

6.03

January 2009

28.75

28.75

2.38

6.18

1) In euros per 100 kilograms of milk with 4.41% fat and 3.47% protein, excluding VAT. This price does not include additional charges or payments.
2) This price applies for members in the Netherlands, excluding VAT
3) This price applies for members in the Netherlands, excluding VAT. A negative basic price of EUR 3.20 per 100 kilos of milk applies. This deduction is paid out in full via the protein price. The protein price published here includes this payment, which is also shown in the milk statements of individual dairy farmers. The negative basic price must therefore be deducted in order to attribute the fat and protein prices shown here to the guaranteed price per 100 kilos of milk.

Milk price, guaranteed price and performance payment
The milk price FrieslandCampina pays its member dairy farmers for the milk they supply consists of the guaranteed price and the annual performance payment.
The guaranteed price is not linked to FrieslandCampina’s result. We base the guaranteed price on the average milk price for Germany, the milk price of Arla Foods in Denmark, the milk prices of Bel Leerdammer, Cono Kaasmakers and DOC Kaas in the Netherlands and the milk price of Milcobel in Belgium. These prices for raw milk are representative for the country concerned. In order to calculate the FrieslandCampina guaranteed price, we weight these milk prices for the volume of milk processed in the entire country in question. In total, this involves about 45 billion kilograms of milk.
Unlike the guaranteed price, the performance payment does depend on the financial results of FrieslandCampina and the approved reservation policy. In principle, we pay out 25% of the company’s result in cash to the members as the performance payment, based on the guaranteed price. The performance payment is paid out annually, in proportion to the value of the milk delivered, following approval of the financial statements.