Rising milk production in the EU and globally is putting downward pressure on the dairy markets. Reports from AHDB dairy show that production from the five key exporting regions (EU28, Argentina, Australia, New Zealand and the US) in October were 4.1% higher year on year. This was mainly due to an increase in production by the EU and NZ. Estimated daily deliveries from the EU 28 were 5.2% more than for the same period in 2018, although it must be remembered this time last year production was falling due to the EU milk reduction scheme.
The GDT average price index did show a small increase of 0.4% at the auction held at the beginning of December, but this was the first rise since September. It will be interesting to see the results of the second event in December (this was taking place as professional Update was going to press). The downward pressure on the markets has led to some farmgate reductions being announced. Following Muller’s announcement earlier in the month, as from January;
- Meadow Foods will make a 1.25ppl reduction
- Glanbia Cheese suppliers will receive a 1.5ppl cut
- Sainsbury’s contracted suppliers will receive a 0.11ppl reduction, based on its cost tracker
- Dairy Crest has said it will be holding its milk price until February.
