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TheDairySite Newsletter - 14 August 2015

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Friday 14th August 2015.
Michael Priestley - Editor

Michael Priestley

Dairy Crisis: What Can Ten Pence On Milk Do?

A supermarket’s ten pence pledge on a new brand of milk has been welcomed by UK farm leaders this week but many say producers can help themselves by curbing production.

Dairy farms from New Zealand to New York are feeling the effects of high milk supplies, and while UK-based retailer Morrisons has been commended for its four pint carton initiative, many economists say it is time farmers turned the taps off.

In New Zealand, Europe and the US, farmers are being told that cutting production will bring benefits.

Levy board DairyNZ is telling producers to cut supplementary feeding and cover lower production with lower costs.

“Removing unprofitable production from our systems is good for individual farm businesses, and will send the market a signal that New Zealand farmers will not produce marginal milk at a loss,” said DairyNZ chief executive Tim Mackle told farmers last month.

This summer has seen milk dumped and processing capacity stretched in the north east of the US.

This is according to the University of Wisconsin’s Professor Bob Cropp who suggested US farmers could address their own prices by cutting production and allowing US prices to recover ahead of the international market.

He wrote that if dairymen successfully reduce milk output, US milk prices could improve by the year-end and into the New Year, significantly earlier second half of 2016, the forecast upturn for the rest of the world - read more.

Meanwhile, another UK supermarket has committed to paying 28 pence per litre on all of its liquid milk.

An Asda spokesperson said: “Today, we have confirmed to our milk supplier, Arla, that we are increasing the price we pay per litre from Monday to a level that will assist our farmers during the current crisis."

The National Farmers' Union (NFU) said the move is "a significant leap forward in recognising the true value of British dairy products."

“This decision recognises that our dairy farmers need a fair price so consumers can ensure they have access to British dairy products now and in the future,” said NFU president Meurig Raymond - See more here.

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Market Reports

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