Steady outlook for milk costs for the autumn

The outlook is for a steady milk value by means of the autumn, regardless of Arla’s 0.9 p / liter drop for September, in accordance with Kite Consulting.

Farm-gate value bulletins for October are anticipated subsequent week from non-cooperative processors adhering to the voluntary code and cooperatives for September.

Shares of dairy merchandise are comparatively tight, serving to to keep up stability, whereas international milk manufacturing is believed to have slowed final month.

Cheese costs are holding up effectively, cheese exports are good, and butter and cream costs are comparatively agency.

See additionally: Solutions to readers’ questions within the FW Enterprise Clinic

The liquid market is troublesome, however on this entrance, the large two [Arla and Muller] do a superb job, in accordance with Kite advisor John Allen.

He thought the Arla reduce not too long ago introduced for September was a correction that had been anticipated and that the co-op wanted to make. “It’s nonetheless a number one value available in the market,” he mentioned.

Arla value drop for September

Dairy processor Arla introduced a 0.9 p / liter value reduce for standard and natural producers, blaming it on continued inflation pressures within the provide chain.

From September 1, the value of the over-account will drop by 1 euro cent, which interprets right into a value for the standard manufacturing liter of standard milk of 32.30 pence / liter and 40.66 pence / liter for natural milk.

This equates to 31.08 p / liter for liquid milk primarily based on 4% fats and three.3% protein.

Past September, the cooperative mentioned the outlook was steady.

Regardless of the excessive feed prices, the general milk to feed value ratio is pretty steady at round 1.1: 1, with Arla members at round 1.2: 1, Allen mentioned. .

Hikes in farm milk costs over the summer season gave producers confidence in feed and cuts in some feed costs contributed to the ratio.

Roll feed utilization has been on the rise over the previous 12 months, though with wheat buying and selling at round £ 180 / t off-farm for September there might be growing strain on the ratio.

The newest GDT dairy on-line public sale noticed its first improve within the final sale (up 0.3%), after declines within the final eight consecutive bi-monthly gross sales.

Whereas this was solely a small improve, many of the earlier declines have been additionally comparatively small, Allen mentioned.

UK spot costs at 33-34 p / liter point out market power, though cheesemakers cannot afford that.

Dangers

Whereas Chinese language demand for dairy merchandise and uncooked supplies is usually sturdy at current, it’s nonetheless topic to political and animal or human well being points.

Chinese language entire milk powder (WMP) imports are at present round 35% above year-to-date ranges in comparison with 2020 volumes.

July’s determine was up 18.5% from a yr in the past in milk equal, with entire milk powder imports exceeding 70,000 t – their highest quantity ever for the month and 76% greater than the earlier file, in accordance with market analyst StoneX.

Imports of skimmed milk powder in July additionally hit a file excessive.

Excessive climate circumstances stay a danger to the manufacturing, consumption and costs of dairy merchandise and different commodities.

Milk manufacturing

AHDB’s estimate for UK manufacturing in July 2021 is 1,248 million liters, in comparison with 1,262 million liters in July 2020.

Milk deliveries to Britain are decrease than the earlier yr and than forecast because the finish of June.

In whole, British manufacturing continues to be increased than on the similar time a yr in the past – 5,306 million liters for April-July 2021, towards 5,254 million liters for a similar interval in 2020.

Deliveries to the EU-27 are on the rise this yr, with whole manufacturing forecast by the European Fee to extend by 0.8% this yr, as uncooked milk costs will stay excessive sufficient to assist offset the rise feed prices.

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