Short supply may not mean milk price rise

By James Garner

HOPES of better milk prices at the farm gate triggered by a winter shortage might be unrealistic, warned industry commentators at this weeks Dairy Event at Stoneleigh.

This is despite a new forecast from dairy co-op First Milk showing that production is set to fall sharply by 6% from late October.

Even that might not be enough to force the price upward, said Francis Mordaunt, of farm business consultant Andersons, at a press briefing on Wednesday (19 September).

“This might lift prices, but it will only be temporary. We need liquid milk, but we can buy product from abroad.

“One thing that could change is currency. This could push the price up to 20ppl if the Euro strengthens against the Pound.”

With all the co-ops deep in price negotiations, a shortfall would improve their bargaining position.

But Jonathan Horrell, communications manager for First Milk, denied the co-op was trying to force the dairy companies hand.

“There has been a lot of speculation about how foot-and-mouth will affect supply, but these are real figures. Supply and demand is part of milk price negotiations.”

Jonathan Ovens, vice-chairman of Express Milk Partnership, disagreed with Mr Horrell. “I wouldnt go along with First Milks figures. A survey of our members shows they might produce more milk than expected.”

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