Some producers milk price is at 12 o’clock
Posted on: 12/08/22
It’s time for Ian to put his brave pants on.
Dairy futures are trending down as are wholesale markets particularly for SMP & WMP.
GDT results (see below) are setting the tone and with 9 out of the last 10 auctions recording average price falls with the average all products price falling below US $4,000. A value not seen since last year. Note the next GDT is on Tuesday 16th.
In addition, consumers are reacting to high prices by buying less or substituting for cheaper non branded products.
On the positive side butter is fairly stable as are UK spot milk prices at 50p plus.
The producers currently on or from 1st September confirmed they will be paid a liquid standard litre price of 48ppl to 50ppl or more had better think along the lines that bar a miracle no more price increases will come and it’s a case of how long can it remain at this level. The best they can hope for is the price holds until at least Spring 2023 and that will be a great result.
Others paying below 48p (based on a liquid standard litre) need to do better and push through catch up payments for 1st September or 1st October. For some processors this will be resisted and they will no doubt try to ride it out at their 1st September price of circa 47p (and some are less) or have to be brought kicking and screaming to deliver a top up.
One wild card which would liven them all up is if Arla were to commence recruiting new suppliers from their long list of farmers who want to dance with them. That would sharpen up the Sub 48p processors very quickly.
In short its 12 o’clock for many dairy farmers and pointing their prayer mats towards Leeds and Denmark praying these prices hold as well as not trying to ramp up production is their best game plan.
Don’t shoot the messenger judge Ians prediction and comments in 6 months time!