Production in December was 1228 million litres, which was down 13.00m litres and 1% on last year. It was also within 1% of 2017.
Volumes for the calendar year were just short of 15 billion litres at 14.983bn, which is 242.17m litres and 1.64% more than last year. It is the highest in recent history. (See Fig 1).
However, Irish milk volumes finished the year at 243.8m litres, which is down 14.70m and 5.7% on last year.
Cumulative volumes for 2019 were 7,989.6m litres, some 5.3% higher than 2018. (See Fig 2).
Taking the British Isles as a whole, milk production for the year totalled 22,972.60m litres, up 618.77m and 2.7% higher than last year.
Ireland accounted for 34.8% of that volume, compared to a pre quota figure of less than 30%. The increase in Ireland’s contribution is exponential.
There is currently considerable uncertainty over the Coronavirus outbreak, and how that might affect Chinese trade patterns.
WMP futures in New Zealand took an early hit, which was reflected in the GDT which was down by 4.7% in the first February auction compared to a rise of 1.7% at the previous one. All of the auction gains made through January have been lost, therefore.
The average monthly price was $3,330 (£2,574) compared to $3,403 (£2,631) at the last auction, the lowest price for six months. But it wasn’t all bad – powders took the biggest hit but butter and cheddar increased, and it could have been worse as the auction prices were not down as low as the futures. (See Fig 3).
The next auction will be critical, however, and will be hugely affected by the spread of the virus and how that affects Chinese sentiment.
Fig 4: Aprx UK milk price based on EU butter & SMP returns (AMPE), less 2ppl transport, last 4 weeks.
The latest official Defra milk price for December is 29.32ppl. The latest AMPE figure for January is 29.43p, after transport, which is up 0.24p on December, with MCVE at 28.21p, up 0.05p. The non-aligned standard litre price is estimated to be 26.83ppl.
In Europe the butter price has increased marginally over the last month to average €3,620/tonne, which at current exchange rates equates to £3,060/t. The average SMP price, including feed grade, is now €2,605/t, which equates to £2,200/t. The combination also results in an AMPE price of approximately 29.5p, after transport. (See Fig 4).
Fig 5: EU milk prices
The average milk price in the EU for December is €33.99/100kgs (£28.82/kgs which is about 29.10ppl), compared to the New Zealand average of €33.80 (£28.66), and the US price of €43.41 (£36.81). The average non-aligned UK price for the month at the same constituents is around €31.34 (£26.57). (See Fig 5).