Farmgate milk prices are likely to remain stable this year, according to DairyCo’s Datum Market Report.
Although skimmed milk powder and butter stocks in the EU and US will weigh on markets, world milk supply is likely to drop, driving commodity prices up. “This could potentially have a positive impact on domestic prices.”
World demand for dairy products is forecast to grow over the next decade as Russia, India and Asia increase their consumption, it says. “Consumption of dairy products increases as incomes increase, so the rate of economic recovery in these regions will be key to any upward price movements.
“On balance, the slowdown in global milk output, rising GDP and gradually shrinking stocks point towards improving price prospects on world dairy markets.” If, as predicted, the dollar weakens, it will blunt any rise in world prices for GB producers – but GB milk production and demand are both likely to remain static, it predicts. “Overall, it appears that farmgate prices may be relatively stable this year.”