Drought in Europe contributes to favourable outlook for milk prices
Milk supplies are affected by these conditions in regions such as the south of England and France, said United Dairy Farmers CEO David Dobbin, after a 0.67 pence per litre increase in their recent milk auction in Northern Ireland.
“We are now seeing EU and local milk supplies ease back, and this has helped stabilise international dairy markets. With the northern hemisphere peak milk supply period now behind us, we expect to see further improvement in United’s auction prices over the next few months,” he said. International dairy prices rose last week in Fonterra’s online auction, by 4.5% on average.
A slowdown in Chinese economic growth towards the end of the year could hit the global market, but in general, demand is robust for dairy products, and northern hemisphere production could be hit by rising grain prices and the European drought.
nEU milk prices in April were 17.7% higher than 12 months earlier, and were the second highest April prices, exceeded only in 2008, according to a report for the LTO farmers’ organisation in the Netherlands. The average price of €32.66 per 100kg included Glanbia and Kerry, both paying above average (but under the €32.75 EU rolling average of the last 12 months), and 16 other major EU processors. These prices are standardised at 4.2% fat, 3.4% crude protein, 500,000kg per year, TBC 24,999, and SCC 249,999, VAT excluded, for milk collected every other day.
