23 August 2002

Be cautious with rising milk prices

MILK prices in Ulster continue to rise at United Dairy Farmers monthly auctions, but the trend may not persist.

The Belfast-based co-op sold 20m litres at its auction on Aug 13, averaging 19.55p/litre. This is 1.5p above Julys average, and a 6p/litre rise since May.

But dairy farmers should not be lulled into a false sense of security, warns UDF chairman Harold Hamilton.

"The increase has more todo with a significant reductionin milk supply due to a combination of wet weather, poor returns and seasonality, rather thanto any fundamental improvement in international dairymarkets."

Even so, the spot price of 19.47p/litre was 0.7p above last years August value despite a considerable drop in world dairy commodity markets.

"We are pleased to see this strengthening of prices, which will be reflected in members September milk prices," says Mr Hamilton. &#42