Wet weather continues to knock GB milk production, with daily deliveries in the two weeks to 7 July at 31.4m litres a day – 3% down on last year. Production in June was 0.4% below last year, at 983m litres, according to provisional data from DEFRA.
In May, the average GB farmgate price was 27.97p/litre – 0.49p/litre down on the previous month, with significant further cuts still to be taken into account over the summer. However, costs of production were soaring to new levels, with cereal and protein prices rocketing due to adverse weather across Europe and America, said a report by The Dairy Group.
It estimated average costs for 2012-13 would increase from 29.1p/litre this year to 30.5p/litre. “Rising production costs might be expected to restrict supplies as marginal production becomes less economic, which means the supply side looks set to under-perform 2011 for the rest of the year.”
Its Market Price Equivalent, for a basket of dairy commodities reflecting actual market returns, increased by 0.43p/litre in June, to 26.31p/litre, with firmer butter, powder, cream and whey values offsetting a drop in mild cheddar prices.
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