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Milk prices are soaring around the world. Swiss farmers will therefore soon be able to demand more for their milk. The costs of dairy products will therefore also increase.
Milk prices are skyrocketing around the world. Thus, the average price at the global milk auction, Global Dairy Trade, rose at the start of the week by 4.2% to reach 4,840 US dollars (regarding 4,300 Swiss francs) per tonne. At the last auction, a month ago, prices had already increased by 4%.
In Switzerland, too, the price of milk will increase, explains Pierre-André Pittet, vice-director of the Federation of Swiss Milk Producers (PSL): “Swiss dairy producers will probably be able to charge around three centimes more per kilo of milk from from April or May. Indeed, from this date, the Interprofession du lait will have to increase the target price.
This price increase will also be felt in the retail trade. “Dairy products will have to be slightly more expensive,” says Pittet. Concretely, the Swiss will therefore soon have to pay more for their yogurts, butter and cheeses.
The reason for this increase in the price of milk would be the increase in global demand for dairy products. “At the same time, production in the EU is stable for the first time in ten years. We therefore produce as much milk as last year”, explains Pittet.
Costs are rising in agriculture
The Swiss Farmers’ Union also confirms that dairy products will soon be more expensive in Switzerland: “Prices need to be adjusted,” says its president Markus Ritter. According to him, costs in agriculture have also increased in general, for example for fertilizers, fuel and construction work.
This is why the increase in the price of milk is certainly pleasant for the peasants, but not a cause for rejoicing: “It is a necessity: the peasants need more money for milk in order to cover the higher costs high”, explains Markus Ritter.
Farmers around the world better paid
Farmers around the world stand to benefit from higher prices. New Zealand dairy giant Fonterra has increased the amount it pays farmers for the current season for the third time in a row.
A new record price of around 9.20 New Zealand dollars (regarding 5.70 Swiss francs) per kilogram of milk solids is now expected, as the agricultural information portal “Agrarheute” writes. It would be the highest price since Fonterra was founded in 2001.
The Department of Economics, Training and Research (DEFR) has decided to release the mandatory fertilizer reserves from January 15. In total, Switzerland holds 17,000 tonnes of pure nitrogen in its mandatory reserves. According to the DEFR, this would not be enough for the whole season, but it should ensure a first fertilization of the crops, important for the growth in the spring. If the missing quantities cannot be covered in the medium term by imports, a reduction in yields is to be expected.
