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TheDairySite Newsletter - 12 April 2013

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Friday 12th April 2013.
Michael Priestley - Editor

Michael Priestley

First Milk Price Cut Fears Voiced at Dairy Summit

Speculation over the potential for further price cuts brought the NFU Dairy Summit to a heated close yesterday.

Industry figure heads, Ian Potter and Jonathan Ovens revealed the possibility of a 1.5-2 pence per litre cut in the First Milk contracts due to a lack of confidence in the cheese market.

Anecdotal evidence gathered by Mr Potter, a milk quota and farm payment adviser, suggests a large segment of cheese manufacturers are currently ‘terrified of the market place’.

Short stocks mean the market is tightening but a reluctance by retailers to lift prices means that producers could yet again feel the pinch as First milk passes the costs down the supply chain.

First Milk External Relations Director, Paul Flanagan told TheCattleSite that price cuts next month are unlikely: “Cuts are on the spectrum of possibility but are the last thing we want to do,” said Mr Flanagan.

A solution to the cheese supply issue appears difficult, according to DairyCo Senior Analyst Patty Clayton. In her address to the Summit she outlined worldwide production limitations.

Australia, the US and New Zealand are all feeling the effects of extreme weather conditions. Droughts have hit all three nations badly with the added problem of floods in eastern Australia.

Mrs Clayton was clear that farmgate milk prices were not helping the situation anywhere, as feed prices and poor forage quality pose a dilemma for producers trying to work with narrowing margins.

With supply problems elsewhere, the cheese stock issue cannot be resolved through imports. Ireland and New Zealand are the major cheese exporters to the UK but an Irish production drop of 12 per cent in the first three months was Mrs Clayton’s reasoning for depending on imports not being an option.

Ireland is unlikely to have butter and cheese meaning that a greater percentage of the milk going into non liquid products, around 45-50 per cent according to Mrs Clayton, needs to go into ‘higher returns fat and proteins’ to alleviate concerns in the cheese market.

In a recent statement, First Milk made it clear that times are tough but they will continue negotiating with their customers.

“The marketplace for cheddar is a problem right now. Money is tight for everyone and the cheese market is as challenging as anything I’ve seen in my entire career,” said Bill Mustoe, First Milk Vice President.

“At this stage we’ve made no decision on milk price and are continuing to speak to our retailer and foodservice customers.”

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Global Dairy Industry News

   United States

NFU Announces Beginning Farmer Institute Participants
USDA Opens Export Markets for Day-Old Chicks, Hatching Eggs and Dairy Cattle
Preparing Livestock in a Flood Zone
Symposium Finds That Milk is Good For Mammals
Supplement Your Feed to Avoid Grass Tetany
Dairy Security Act Delay Has Caused $1 per cwt Losses
Summit Provides Insight on Food Safety, Ag-Gag Law
Reduce Hay Wastage By Considering Ring Feeder Changes
Count Alfalfa Stems To Understand Root Health and Growth Potential
CME: USDA Expected to Revise Estimates of Corn Ending Stocks
Progress Made in Johne’s Detection and Understanding
Grain Inventories, New Crop Outlook Boost Livestock Prospects
NFU Commends President's 2014 Budget
April Report Forecasts Tight Corn and Soybean Supply
Research to Improve Johne's Identification


Chinese Food Prices Keep Falling


Grass Tetany Prevention
US Grain Futures Weaken Modestly in Wake of USDA's Supply and Demand Report
Bull Indices Welcome Newcomer
Outlook Rests on Supply Issues and Cheese Stocks
Dairy Nudges FAO Food Price Index Higher by One Per cent


'Increase in the Price of Milk Does not Affect Consumption'


Climate Change Blamed for Tick Spread


Sustainability Push Offers Land Owners Money Making Opportunities
Spreading the Carbon Farming Facts


Policy Discussions Reveal Cost of Dairying
Dairy Safety Demands Continue to Grow


Food Waste has Environmental Downside

   United Kingdom

Conference Examines Science Behind Large-Scale Production
Fair Pricing Demanded on Cheese

   New Zealand

Tuberculosis Reported in Taranaki
So Far So Good With Emergency Forage Shipping


Cell Count Results Vital For Monitoring Udder Health


Survey Finds Milk Consumption and Spending Down for 2012


Government Blames Production Gap on Cattle Smugglers


First Quarter Figures Down For Grana Padano

   European Union

Campylobacter E. coli Cases Rise Salmonella Falls
Does Having Protected Geographical Status Boost Product Values?


OIE: Rabies Identitified in Greece After 25 Years

   South Africa

Critical Feed Issues Under Discussion at IFRM


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