Guaranteed price for February remains stable at 35.65 euros

7 February 2011


The guaranteed price for the month of February has been fixed at 35.65 euros per 100 kilograms of milk. The guaranteed price therefore remains at the same level as in January. Although market quotations for milk powders and butter show a rising trend, the rates paid for raw milk at the reference companies for the guaranteed price remain reasonably stable. The prices paid in Germany are trailing behind the other countries in that respect.

The guaranteed price applies to 100 kilograms of milk with 4.41% fat and 3.47% protein and is exclusive of VAT. The guaranteed prive is the price that FrieslandCampina guarantees to pay the member-dairy farmers for the milk they deliver in the relevant period. This price is independent of the result of the FrieslandCampina company.

FrieslandCampina guaranteed price

2011

2010

Per 100 kilo milk

Cumulative average per 100 kilo milk

Per 100 kilo milk

Cumulative average per 100 kilo milk

January

35.65

35.65

30.00

30.00

February

35.65

35.65

28,50

29,25

March

28.00

28.83

April

29.25

28.94

May

31.50

29.45

June

34.25

30.25

July

33.75

30.75

August

33.75

31.13

September

33.75

31.42

October

34.65

31.74

November

35.65

32.10

December

35.65

32.39

Prices 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.Fat price for February 2011: 4.00 euros per kilo, protein price: 6.09 euros per kilo.

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, July and December 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 2.45. After settlement of additional payments and charges, the cash payment in February for a dairy farm delivering 500,000 kilograms of milk is EUR 35.39 per 100 kilograms of milk, exclusive of VAT.

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, annual performance payment and the registered reserves (issue of fixed member bonds).
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 are the average annual prices, including payments in arrears and registered reserves.  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. Each month, the guaranteed price consists of the expected guaranteed price in the relevant month and any settlement of differences in expectations from preceding months.
Unlike the guaranteed price, the performance payment and the registered reserves do depend on the financial results of FrieslandCampina and the approved reservation policy.
In principle, we will pay 30 per cent of the company’s result for the 2011 financial year to members as a performance payment in cash and 20 per cent will be added to registered reserves in the form of fixed member bonds. Both are paid out annually, after the approval of the company’s financial statements, in proportion to the value of the milk supplied.