TheDairySite Newsletter - 21 April 2011

Welcome to this week's newsletter

Editorial: Price Increases Needed Now For UK Dairy Producers

UK dairy farmers have sat back and watched the industry weaken for too long. It is imperative they become price makers. Investment is urgently needed on the majority of dairy farms, demonstrating that the current prices are unsustainable.

These are some of the messages to come out of the National Farmers' Union (NFU) Dairy Summit in the UK yesterday.

Recently, the EU high level group has made recommendations to strengthen dairy contracts, with transparent pricing mechanisms.

With this in mind, NFU Scotland, with the help of Dairy Co, has launched a proposal it believes could fundamentally improve the UK milk market.

The proposal is based on a new, transparent and market-related pricing formula to be incorporated as a baseline into producer contracts. If adopted, it would break the cycle of market failure in the dairy supply chain and allow all producers, irrespective of their supply relationship, to move forward with improved confidence and greater certainty.

The price formula is based on the existing market indicators of Actual Milk Price Equivalent (AMPE) and Milk for Cheese Value Equivalent (MCVE), in a 20 per cent to 80 per cent split.

At yesterday's meeting there was a difference of opinions on whether prices should be formulated by tracking the cost of production or the market. NFU Scotland believes that tracking the market allows greater price flexibility, allowing producers to benefit from market highs. A cost of production price formula effectively caps the price producers receive, said dairy representatives.

The delivery of any formula across the supply chain will be a challenge, and NFU Scotland is urging people to step forward with any constructive comments and recommendations.

It is fundamental to the success of the UK dairy industry that the whole supply chain gets behind this new price formula, in order to drive sustainable change in the dairy industry.

Owing to several public holidays in the UK over the coming two weeks, the next newsletter from TheDairySite will be mailed to you on Friday 6 May.

Charlotte Johnston

This Week's Feature Articles

We have 4 new features this week:

Out - Wintering Yearling Heifers On Woodchip
Out-wintering replacement heifers on woodchip pads compared to housing offers improvements in health and behaviour and comparable levels of performance, according to research undertaken by Teagasc.

Indonesia/ Australia Live Cattle Export: Feedlots
Australia and Indonesia have developed a strong bilateral relationship in livestock trade that has resulted in important commercial partnerships between industries in both countries. This section of an independent report, studying animal welfare conditions, looks at welfare in feedlots.

Livestock, Dairy, and Poultry Outlook - April 2011
High beef prices continue in the US, however with supplies of heavier fed cattle expected to hit the market, some believe prices may fall, according to the latest Livestock, Dairy, and Poultry Outlook from the USDA's Economic Research Service.

Feed Outlook - April 2011
The recent grains stocks report confirms that supplies are tight, according to Tom Capehart and Edward Allen in the latest report from the USDA Economic Research Service.

Genus - Value through science and genomics

Company News

VIV Russia 2011 To Stage Dairy & Poultry Forum
RUSSIA - The ‘'Russian-Dutch Agribusiness Forum on Dairy and Poultry’ will be held at VIV Russia 2011. The trade show takes place on 17 to 19 May at the International Crocus Exhibition Center in Moscow.

Global Dairy Cattle Industry News