Dairy commodity markets strengthening

The first GDT event of February was up by 1.8%, making it six successive auctions that prices have increased.

Butter was the standout commodity with prices jumping by 6.2%, while cheddar rose by 2.3%. Whole milk powder rose by 2.3%, but skim milk powder fell 1.5%.

EU dairy markets are also on an upward price curve from the outset of the year.

UK dairy shift to block calving

While the majority of UK dairy farmers are still year-round calving, there is a definite switch towards block calving, especially in the autumn.

“We are definitely seeing a move to more block calving systems and a move towards higher yields from forage,” Mike Houghton from Andersons told attendees at a press briefing on Monday. He said that the change is being driven by farmers looking to maximise efficient use of inputs, which indirectly will also lower the carbon footprint of milk production, and benefit the industry into the longer term.

Stable prices

In the short term, the Andersons analysis points to continued stability in milk prices, with world demand keeping pace with supply. “Production isn’t rising in the EU.

New Zealand output hasn’t changed that much and the Americans are relatively stable as well” said Houghton.

The environment is key – Arla chief

The top issue on the minds of customers for dairy products is sustainability and the environment, Arla’s managing director Ash Amirahmadi told a Semex event on Monday.

“It is really important for our industry to get our head around this, and work out what does this mean for us, and how do we embrace this and use it to be a power for good, rather than something to fear,” he told attendees.

He warned about increased regulation being forced onto the industry driven by the climate agenda, and also by concerns around obesity and human health.

But while he recognised that there are headwinds to navigate, he said he “passionately believed” there are many more opportunities ahead, with wider recognition of the importance of dairy in a healthy diet, and new online channels opening up to sell products.

Read more

Prices at Global Dairy Trade rise again

Mixed milk from island of Ireland not eligible for EU supports