The Outlook

In a Nutshell it is positive with the real possibility that during 2022 some producers will receive a 40ppl standard litre price.  In short more farmgate milk price increases are to come.  At processor level a handful of liquid processors, one broker as well as at least one cheese processor are clearly struggling to push through customer price increases which is holding their farmgate milk price at the bottom.  Throw into the mix the fact most of these businesses are also buying spot milk and it’s a lethal cocktail.

Survival will be their Number 1 goal alongside retention of producers which will not be easy when they continue to pay some of the lowest GB farmgate milk prices.  No milk = No business and the milk price paid now is the one farmers are basing decisions for next winters production.

 

If a processor can’t sell milk and cheese in this market he should quit, no one is able to take on new business or do predatory pricing.  Yes, a few small customers can duck and dive but milk is short and costs are escalating.

 

Milk has been too cheap for too long it’s now time to make sure all in the chain soar with the eagles and no longer scrat with the hens.  Processors and farmers have the perfect opportunity to reset the clock and make a sensible margin.

If UK customers won’t buy our dairy products at a fair price mainland Europe and the World will.  Globally demand for dairy is rising and it’s predicted to continue.

The charge is undoubtably been led by Arla whether we like it or not and let’s hope it continues.  Sadly, some of those who want to peg producer prices back will fail and drop of the perch in 2022.