Dairy Roundup September 16, 2015 12:00 am GDT Auction Rises Again There is some hope that global dairy prices may have turned a corner. The latest Global Dairy Trade (GDT) auction on 15th September saw milk prices increase by 16.5% to $2,568. This is the third price rise in a row since hitting a four year low at the start of August. Fonterra has pulled some product off the auction for later in the year; effectively lowering the volumes available. This has helped boost prices in the short-term, but places a question-mark over whether supply and demand are really getting back into balance. More positively, Fonterra has cut milk supply projections which could be a more fundamental shift in market prospects. The next auction is on the 6th October. Global Dairy Trade Average Price 2013-2015 Dairy Farmer Intentions Results from an RABDF survey show that industry confidence remains low. The survey found that 49% of producers saw no future for themselves if current farmgate milk prices persist for the next six months. UK Prices At the start of September Tesco announced that it would extend its minimum milk price from liquid milk to its own-label cheese. A higher cheese price, equivalent to the Tesco Sustainable Dairy Group (TSDG) liquid milk price, currently 29.9ppl, will be paid to Tesco’s cheese supplier Adams Foods. This, in turn, will be passed on to the manufacturers, First Milk and South Caernarfon Creameries (SCC). First Milk has already announced that the extra money will be ring-fenced for those in its Haverfordwest milk pool, as the factory that supplies Tesco cheese. It should raise the milk price by around 2ppl. SCC had previously announced a 0.5ppl price cut for September, but this is likely to be rescinded and an increase put in place. As well as liquid milk the TSDG already has a cost-of-production contract operating with Parkham Farms for mature own-brand cheddar. Dairy Crest has announced its non-aligned liquid and Davidstow prices will remain unchanged for October, at 21.7ppl and 25.3ppl respectively. DC’s formula price will reduce by 0.36ppl to 26.8ppl for October.
