Market report: Milk deliveries and consumption on the way back up

Milk deliveries in October increased by 2.8% to 1021m litres, according to latest figures from the Rural Payments Agency.

This is well ahead of the average increase of 1.6% between September and October, probably due to the favourable weather conditions, especially when compared to last year. However, October deliveries were still 3.3% below the five-year average and cumulative production is 0.1% down on last season.

Meanwhile, liquid milk sales in GB have increased by 4.2% since 2004, due to population growth and higher individual milk consumption. TNS data show that annual in-home consumption has increase by 1% over that time, to 82 litres/head.

“If the growth in liquid milk sales, coupled with the trend of relatively low milk production continues, a larger proportion of the GB milk supply will be processed into liquid milk,” says DairyCo’s latest Dairy Market Update.

“This means a greater proportion of milk will receive the premium price associated with liquid milk contracts and fewer litres will be fully exposed to the volatility of the commodity markets.”