Milk yields limit price rise prospect

By Robert Harris

MANY milk sellers are pinning their hopes on a milk shortage this autumn to help secure better prices.

But independent consultant Michael Bessey believes they could face a tough time extracting more money from dairies.

“It has been pretty easy to replace milk that was lost through culls, especially as farmers feel they have had a free run to produce as much as they like.

“More people are starting to think we may not fall far short of quota at the end of the milk year.”

Market signals wont help the milk sellers cause either, he suggests.

In recent weeks, butter has eased by about 50/t to about 1900/t, and skimmed milk powder has weakened to about 1450-1500/t.

But John Duncan, chairman of co-op First Milk, still believes prices will rise.

A First Milk survey showed that farmers would only keep older cows until they started costing money – towards the end of September, he says.

“There will then be a huge reduction and a further significant hole in the middle of winter, due to delayed inseminations soon after foot-and-mouth broke out.”

Negotiations with dairies are due to start next week, says Mr Duncan.

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