UK dairy prices slide to eight-year low

British dairy market returns are at an eight-year low, according to an industry indicator.

The Dairy Group’s market price equivalent, which weights wholesale prices for different products, has fallen to the lowest point since May 2007.

In May, the measure slid 0.4p/litre to 24.3p/litre.

Cheese and butter values are higher than in 2007 but milk powder prices, which are important in global trade, are significantly lower.

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The Dairy Group’s Nick Holt-Martyn said UK farmers were producing an extra billion litres every year than they were back then, of which half has gone into powders, which are currently struggling.

He said this was also true for the higher supplies of European milk being pumped out this year.

“Until supply stabilises there can be little if any recovery in market returns without an unlikely significant shift in demand,” Mr Holt-Martyn said.

“Milk pricing for the rest of 2015 awaits the new season reports in New Zealand for any signs of reduced supply, combined with a response in the EU showing supply easing off through late summer and autumn.”

World benchmark, the Global Dairy Trade auction, saw another heavy fall this week, the sixth drop running.

The average winning price decreased 4.3% to US$2,412/t (£1,574) and all products recorded falls,

Returns from the auction have not been this low since August 2009.