Favourable weather conditions and good milk prices during the 2011-12 period resulted in increased milk production, however this wasn’t met by forecast demand.

Delivering a seminar at Livestock 2012 on the outlook for the dairy market, DairyCo market specialist Matt Johnson described this as a “lack of a perfect storm”.

The cream price had virtually halved in the past year and although there has been a bit of an upturn in the market, there is the potential for another market dip following the release of the private storage stocks (PSA) of butter, he said.

“With cream we have still got that link with butter prices – 130,000t have been put into PSA stores this year and we don’t know how much of this has been sold and it could affect the price,” added Mr Johnson.

During the two week period ending 18 August milk delivered to dairies in the UK was 1m litres less than the same time last year; unless there is a mild winter there is going to be a challenge with milk supply, he said.

For more on this topic

See our Livestock 2012 page

Gemma Mackenzie on G+