Milk Production and Prices June 23, 2015 12:00 am Production Latest UK daily milk deliveries for the two weeks ending 6th June show production remains strong. At 43.6 million litres per day deliveries are 3.3% more than for the same period last year. It appears the rise in output is due to an increase in cows reaching their peak production age. The increase in production is not limited to the UK, there are reports of strong milk output from the major exporting regions. Milk production forecasts from the USDA have been revised upward since last month. The latest report from the World Agricultural Supply & Demand Estimates (WASDE) forecasts US production to increase by 1.3% in 2015 compared to 2014 and a further rise of 2.5% in 2016 on 2015 levels. However in New Zealand, milk production is forecast to ease in the 2015/16 season (June to May) although it is still at historically high levels. However, this is only expected to be short lived, as output is forecast to recover again after 2015/16 albeit at a slower rate, increasing by 2-3% per annum. Closer to home DG Agri are forecasting EU milk production will grow by 1.2% per annum from the 10 highest milk-producing nations. Prices All these forecasts of high levels of production are continuing to place downward pressure on farmgate prices and the recovery may take longer than had hoped. The latest Rabobank Dairy Quarterly report suggests that the supply imbalance could continue into 2016, meaning a recovery in prices in 2015 is unlikely and it could even be the second half of 2016 before any significant price recovery is seen. Furthermore, the latest Global Dairy Trade (GDT) held on the 16th June recorded another fall in it’s index price; the seventh drop in a row. The average price fell by 1.3% and is at an all time low, but on a positive note the drop in prices have been getting less over the last few auctions and there are signs (hopes) that the price may now be stabilising.
