Dairy commodities firm

DAIRY COMMODITIES are holding their own in price terms, despite an unstable market.

Independent consultant Mike Bessey said he was hopeful commodity prices would remain firm until the autumn at least.

This despite cut to European intervention prices of 7.5% for butter and 5.3% for skimmed milk powder this July.

A lot depended on how much the Commission played with export and domestic support schemes to enforce those cuts, said Mr Bessey.

SMP was the strongest market at the moment, he said. “It could be quite firm for the autumn.”

Intervention stocks were low with more product was going out than coming in and there was less scope for EU market makers to influence the market.

But butter was more of a worry, said Mr Bessey. “People are a bit more nervous.

“The Commission has quite a large stockpile to play with.” Output was also likely to increase with demand slipping, he added.

Cheddar prices had slipped slightly, but Mr Bessey said values should still hold up in the short term.

However, he said he wasn’t sure if the successful campaign to boost farm-gate milk prices would have the same impact on milk-for-cheese values as it had done for liquid milk.

David Handley, chairman of Farmers for Action, was still confident that prices would improve.

“I would be very, very disappointed if don’t see something coming through for June milk.”

He said the big-three cheese makers had all agreed to send out invoices reflecting farmers’ extra costs of production, estimated to be worth about £250/t.