Tougher dairy trading conditions predicted for 2012

More than 83% of dairy processors tracked by DairyCo increased their milk prices in October, with a further 28% boosting payments in November.



The latest round of price rises puts Dairy Crest back to the top of the league table, followed by Wiseman and Arla. The addition of Pattemores Dairy brings the league to 40 contracts.


“After the October price increases have been applied to the DairyCo standard litre, 10 aligned liquid contracts now exceed 30p/litre,” said a report by DairyCo. “However, going into 2012 trading conditions are predicted to get tougher, and weakening macro-economic influences are already contributing to lower dairy product prices at both wholesale and retail level.


“Abundant milk supplies from the Southern Hemisphere are reportedly destined to end up as UK butter imports,” it added. “This could see a knock-on effect on all dairy products feeding into the UK market from early 2012. A fall in wholesale prices as a result of increased supply and weaker demand are now considered likely. However, long-term global demand trends may help to soften the impact of any potential price trough.”


 


 


 


market report

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