What does this all mean for milk prices?

With cream prices having dropped from 1.35 to £1 in under three weeks, liquid processors are under pressure.

It’s serious, and don’t shoot the messenger but unless a processor has connections with Ian’s relation, Harry Potter, holding liquid non-aligned farmgate prices at current levels will be close to mission impossible as more milk is forced into commodity markets and with our driers at full stretch distress milk has returned big time.

Also remember its still cold and when things do warm up, the quantities of milk “trying” to find a home will escalate and be serious.

Woodcocks/Yew Tree Dairy’s facility is already rammed full to capacity.  There must soon be calls for some sort of intervention type buying / private storage to open asap.

Very quickly farmers will value the security of getting all their milk lifted and paid for. The latter will be a real worry for those who have suddenly gone from a maximum 7 weeks milk outstanding to almost 12  weeks by May under new forced payment arrangements.

This will have very serious long-term consequences and it is starting to feel very painful and time to buckle up and sadly for some it won’t be a case of can I find a new milk purchaser, more can I find a buyer for my cows. 

Processors cash flow budgets have been blown up and whilst some are clearly very worried over long term farm supply base , they either take mitigation steps in conjunction with their farmers or risk shutting up shop. Most liquid processors Ian has spoken to are having to ditch the code one-month price movement notice period and review the situation almost on a daily basis with several stating “I am working to avoid the Freshways approach”. For sure, sadly some businesses will be casualties.